DISCRETIONARY, INTER-VIVOS TRUST DEED – EXPLANATORY NOTES
This is a deed that is to be used for a discretionary, inter-vivos trust, such as, but not limited to, a family trust, a charitable trust or an investment trust.
Inter-vivos trusts are also known as living trusts as they are created during the lifetime of the founder/settlor/donor. They are different from testamentary trusts, which are created pursuant to the founder’s death and in terms of his/her will. Testamentary trusts are also known as trusts mortis causa.
Living trusts are generally used to protect assets from creditors and to reduce estate duty. Provided that they are used correctly, and not attacked as sham trusts, they can be very effective from an estate and tax-planning perspective, and to mitigate legal risks in respect of personal assets. As trusts do not die, they are not liable for estate duty and executors’ fees.
A discretionary trust is one in which the trustees have the discretion to determine which of the beneficiaries receive assets and in such portions as the trustees determine. Again, this is a deed for a discretionary trust. It is to be distinguished from a deed for a vesting trust, which is one pursuant to which a founder will pre-determine which assets go to which beneficiaries and when. A trust may also be a hybrid of a vesting and a discretionary trust (“a hybrid“).
Please do not use this trust deed if you want to set up a vesting, living trust, or if you wish to set up a hybrid trust deed.
This is a very comprehensive deed for a discretionary, inter-vivos trust with detailed drafting and guidance notes therein to assist with the conclusion of such.
It is over 32 pages long and is typed up using Bookman Old Style (11) font.
You may email firstname.lastname@example.org for a quote to review your completed deed and trust registration documents, or you may approach a legal practitioner of your choice.
NOTE: You are not obliged to seek review and once you are satisfied with your final document, please arrange for registration thereof with the applicable Master’s Office. You must register the trust deed in the High Court in whose jurisdiction, the majority of the trust assets reside. This is the DOJ link that you must click which details the processes for registering your trust deed. http://www.justice.gov.za/master/trust.html
It is prudent that you print a copy of the Trust Property Control Act, 57 of 1988. This is easily obtainable online and a copy is also available at www.justice.gov.za.
PLEASE NOTE: All trusts must register with SARS concerning taxes for which such trust may be liable. For further information, please visit www.sars.gov.za/ClientSegments/Businesses/Trusts/Pages/Registering-as-a-Trust.aspx
It is prudent to become au fait with the above Act and to keep oneself apprised of developments in trust law as the administration and use of trusts can be very technical. While there is a plethora of information, online, and which we encourage you to read, it is highly advised that you seek legal, accounting and financial advice from time to time regarding the trust of which you may be a founder, trustee and/or beneficiary.