Yes, there are different types of Trusts which consist of the following:

TESTAMENTARY TRUSTS – also referred to as Mortis Causa Trusts.

INTER VIVOS TRUSTS – these can be classified as Court Order Trusts, Discretionary Trusts, Charitable Trusts and Special Trusts.

TESTAMENTARY TRUSTS – A Testamentary Trust comes into existence at the death of the Testator/Testatrix and the Trust Deed is found in the Will.

INTER VIVOS TRUSTS – An Inter Vivos Trust is created during either the life of the founder or in terms of a court order.  Inter Vivos is latin which translates to “between the living” and is a legal term that refers to a transfer or a gift that is made during one’s lifetime.

The main objective of a Trust is to protect and maintain assets owned by the Trust for the benefit of the beneficiaries.  The assets of the Trust do not form part of the estate of the founder and beneficiaries.

A trustee may be a natural person or a juristic person with a nominee and is appointed to administer the Trust and the assets of the Trust in accordance with the Trust Deed.

The trustee has a fiduciary duty towards the beneficiaries of the Trust and must act with the necessary degree of care, skill and diligence that is expected from someone in his/her position.  The trustee has a duty to manage, protect and maintain the assets of the Trust for the benefit of the beneficiaries and should he/she fail to do so, he/she may be removed from office in terms of a court order or by the Master of the High Court.

The Master of the High Court requires the appointment of an independent trustee.

There are two types of beneficiaries in a Trust, namely Income Beneficiaries and Capital Beneficiaries.  Capital Beneficiaries are entitled to the Capital (Assets) of the Trust while Income Beneficiaries are entitled to the Income generated by the Trust.

Capital Beneficiaries and Income Beneficiaries may be the same person(s).

A Trust is registered at the Master’s Office that has jurisdiction over the area where the majority of the Trust’s assets are located.  Trusts are normally created with only one asset, namely R100 donation.

Each Master of the High Court supervises the administration of Trusts by the Trustees in his/her jurisdiction.  The Master of the High Court has the power to register and dissolve Trusts, appoint and remove trustees and may also request trustees to provide him/her with financial statements of the trust or may initiate investigations into the administration of the Trust.

A Trust is not regarded as a legal person except in terms of the Income Tax Act.  A Trust is represented by the trustees in their capacities as such.

Yes, all Trusts are required to register for Income Tax.

An important question to ask is whether your Inter Vivos Trust Deed is valid and up to date. Unfortunately, many Trust Deeds are outdated and sometimes invalid.  It is therefore important to have your Trust Deed reviewed.  A Trust Deed that is outdated, missing important clauses or even invalid can have unpleasant consequences.