The Foundations of Trusts in South Africa

This article forms part of our three-part series on Trusts in South Africa, exploring what they are, how they are created, and how they work in practice. The aim is to make an often complex topic clear, relevant and accessible to everyone.

“For in the end, wealth is not just what we own, but what we preserve for those who come after us.” These words, often echoed in the world of estate planning, capture the essence of a trust. Yet for many South Africans, the concept of a trust remains wrapped in mystery — something reserved for the rich and powerful. The truth is far simpler. A trust is, at its heart, a legal way of looking after assets for the benefit of others. It is not a product for the wealthy alone, but a tool for anyone who wants to protect what they have built.

The idea of a trust is centuries old. It can be traced back to English common law, where knights leaving for battle entrusted their lands to friends to manage until they returned. Over time, this practice developed into a formal legal structure, recognised in both English and Roman-Dutch law — and eventually adopted into South African law. Today, trusts remain one of the most flexible and reliable ways to hold and protect property, especially when family or future generations are involved.

A trust is not a company or a person. It is a legal relationship created when someone, known as the founder, transfers property or assets to another person or group of people, called trustees, to manage for the benefit of others — the beneficiaries. The founder sets the rules in a written document called a trust deed, which becomes the foundation of how the trust will operate. The trustees must then manage the trust with honesty and care, always in the interests of the beneficiaries.

In South Africa, there are two main kinds of trusts. A living or inter vivos trust is created while the founder is still alive, usually to manage family wealth or safeguard property for children. A testamentary trust, on the other hand, only comes into being after the founder’s death, usually through a will, to protect assets for heirs until they are old enough or responsible enough to manage them. Each has its place and purpose, depending on the family’s needs and the founder’s intentions.

Trusts are used for many reasons. They can make estate administration easier, keep property safe from creditors, and ensure that minors or vulnerable people are looked after. In some cases, they can also help with tax planning, though this has become far more regulated in recent years. More importantly, a trust provides structure and peace of mind — a clear plan for how assets are to be used, protected and passed on.

It is worth remembering, however, that a trust must be created for the right reasons and managed properly. A poorly drafted or badly managed trust can cause more harm than good. As one legal writer once said, “A trust is only as trustworthy as those who hold it in their hands.” The law expects trustees to act with integrity, independence and diligence — because a trust is, in essence, an act of faith.

In the next article, we will look at how a trust is formed, what is required to register it with the Master of the High Court, and how to ensure it begins on solid legal ground.

Written by: Maret Carroll and Irma Gaybba
Moderated and approved by: Stacey Barnard

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