{"id":763,"date":"2021-07-13T13:14:39","date_gmt":"2021-07-13T13:14:39","guid":{"rendered":"https:\/\/www.innov8fs.co.za\/blog\/?p=763"},"modified":"2026-03-18T11:46:45","modified_gmt":"2026-03-18T11:46:45","slug":"trusts-requirements-and-structure-part-3","status":"publish","type":"post","link":"https:\/\/www.innov8fs.co.za\/blog\/2021\/07\/13\/trusts-requirements-and-structure-part-3\/","title":{"rendered":"TRUSTS: REQUIREMENTS AND STRUCTURE (PART 3)"},"content":{"rendered":"<p style=\"font-weight: 400;\">You and your client decide to create a Trust as part of his\/her estate planning process.<\/p>\n<p style=\"font-weight: 400;\">The next question therefore is: What are the essential requirements for a valid Trust as set out in the Trust Property Control Act?<\/p>\n<p style=\"font-weight: 400;\">In this, our third discussion on Trusts, we discuss these issues.<\/p>\n<p style=\"font-weight: 400;\">In the creation of a Trust, the following are the essential requirements of a valid Trust as per\u00a0<strong>Administrators, Estate Richards V Nichol 1996 (4) SA 253 (C):<\/strong><\/p>\n<ul style=\"font-weight: 400;\">\n<li>The founder must have a clear and unambiguous intention to create a Trust and transfer control.<\/li>\n<li>The Trust must be set up in writing in the trust instrument\/Trust Deed.<\/li>\n<li>Trust property must be clearly defined.<\/li>\n<li>Trust beneficiaries must be clearly defined or identifiable.<\/li>\n<li>The object of the Trust must be clearly stated and lawful.<\/li>\n<li>There must be a binding obligation on the trustee(s) to administer the Trust property.<\/li>\n<li>Trust property must be transferred into the Trust.<\/li>\n<li>Trustees must be authorised and have the capacity to act.<\/li>\n<\/ul>\n<p style=\"font-weight: 400;\">When contracting with a Trust,\u00a0<u>the following rules apply:<\/u><\/p>\n<ul style=\"font-weight: 400;\">\n<li>The Trustees must be qualified to act. Should a trustee not be duly appointed or becomes disqualified, the person cannot validly represent the trust. This can render agreements void.<\/li>\n<li>The Letters of Authority granted by the Master of the High Court is the written evidence of duly appointed trustees; one must always make sure that that the person representing the trust is capable of binding the trust.<\/li>\n<li>Verify that the required minimum number of trustees as stipulated in the trust deed is in place; an agreement will not be binding without this. (This is especially important if a trustee has died or was disqualified).<\/li>\n<li>Ensure that the \u201cJoint Action Rule\u201d is adhered to \u2013 co-trustees must always act jointly regarding Trust administration.<\/li>\n<\/ul>\n<p style=\"font-weight: 400;\"><strong>Structure of a Trust<\/strong>:<\/p>\n<p style=\"font-weight: 400;\">The following are the elements of a Trust:<\/p>\n<p style=\"font-weight: 400;\">Founder: Person who forms a Trust to transfer ownership of assets\/funds.<\/p>\n<p style=\"font-weight: 400;\">Trustees: Appointed persons who administer and control the Trust assets on behalf of the beneficiaries.<\/p>\n<p style=\"font-weight: 400;\">Trust: Entity that holds the Trust property.<\/p>\n<p style=\"font-weight: 400;\">Assets: Trust property (assets\/funds) is transferred to a Trust by:<\/p>\n<ul style=\"font-weight: 400;\">\n<li>Donation<\/li>\n<li>Sale<\/li>\n<li>Death<\/li>\n<\/ul>\n<p style=\"font-weight: 400;\">Beneficiaries:\u00a0 Person\/s who benefit from the assets, they can either be income or capital beneficiaries, and can have vested or discretionary rights.<\/p>\n<p style=\"font-weight: 400;\">In the estate planning and Will drafting discussion, one needs to be familiar with the various pieces of legislation to best assist clients.\u00a0It is therefore important to deal with a specialist about the formation and administration of a Trust to avoid the pitfalls and challenges.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>You and your client decide to create a Trust as part of his\/her estate planning process. The next question therefore is: What are the essential&hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-763","post","type-post","status-publish","format-standard","hentry","category-innov8ions"],"_links":{"self":[{"href":"https:\/\/www.innov8fs.co.za\/blog\/wp-json\/wp\/v2\/posts\/763","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.innov8fs.co.za\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.innov8fs.co.za\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.innov8fs.co.za\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.innov8fs.co.za\/blog\/wp-json\/wp\/v2\/comments?post=763"}],"version-history":[{"count":1,"href":"https:\/\/www.innov8fs.co.za\/blog\/wp-json\/wp\/v2\/posts\/763\/revisions"}],"predecessor-version":[{"id":764,"href":"https:\/\/www.innov8fs.co.za\/blog\/wp-json\/wp\/v2\/posts\/763\/revisions\/764"}],"wp:attachment":[{"href":"https:\/\/www.innov8fs.co.za\/blog\/wp-json\/wp\/v2\/media?parent=763"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.innov8fs.co.za\/blog\/wp-json\/wp\/v2\/categories?post=763"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.innov8fs.co.za\/blog\/wp-json\/wp\/v2\/tags?post=763"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}