An inter-vivos trust, also known as a living trust or a revocable trust, is a legal arrangement in which a person (known as the grantor or settlor) transfers their assets to a trust during their lifetime for the benefit of themselves and/or others. Unlike a testamentary trust, which is created through a will and takes effect upon the grantor’s death, an inter-vivos trust is established while the grantor is still alive.

In an inter-vivos trust, the grantor typically serves as the initial trustee and retains control over the trust assets. They can manage, use, and enjoy the assets as they see fit. The trust document outlines the specific terms and conditions under which the trust operates, including how the assets should be distributed during the grantor’s lifetime and after their death.

WHAT ARE THE LEGAL REQUIREMENTS AND PROCEDURES FOR SETTING UP AN INTER-VIVOS TRUST IN SOUTH AFRICA?

Founder/Settlor: You need a founder or settlor who establishes the trust and transfers assets into it. The settlor must be legally competent and have the intention to create the trust.

Trustees: A minimum of two trustees are required, and they must be natural persons or juristic entities such as a company or a close corporation. At least one trustee should be a South African resident or a company incorporated in South Africa.

Beneficiaries: You must identify the beneficiaries who will benefit from the trust. Beneficiaries can include individuals, organizations, or a class of persons. It’s important to clearly define the rights and entitlements of the beneficiaries.

Trust Deed: You need to draft a trust deed, which is a legal document outlining the terms and conditions of the trust. The trust deed should include the trust’s objectives, the powers and duties of the trustees, the rights of the beneficiaries, and any other relevant provisions.

Assets: The settlor must transfer assets into the trust, which may include cash, investments, immovable property, or other valuable assets. It’s essential to ensure that the transfer of assets is legally valid and compliant with relevant regulations.

Registration: Although not mandatory, it is recommended to register the trust with the Master of the High Court in the jurisdiction where the trust’s main administration will occur. Registration provides certain administrative benefits and legal recognition.

Tax Considerations: Consult with our qualified tax professionals to understand the tax implications of establishing an inter-vivos trust. There may be tax obligations, such as income tax, capital gains tax, and donations tax, which need to be addressed.

Compliance and Reporting: As a trustee, you have fiduciary duties and must comply with various legal requirements. This includes maintaining proper accounting records, submitting annual financial statements, and fulfilling tax obligations.

INSIST ON DEALING WITH EXPERIENCED INTER-VIVOS TRUST ATTORNEYS

PM Attorneys is one of the leading trust law firms in Pretoria, practicing from its offices in Centurion. Our specialist trust lawyers and Trust Law firm has successfully been operating since 2008. PM Attorneys’ trust experts employ a formidable litigation team with extensive experience in resolving trust-related matters that specialises in the registration and administration of inter-vivos trusts across South Africa. We advise on trust tax issues, conduct trust litigation, and provide trust opinions for litigation matters. Our team further specialises in resolving disputes amongst trustees and/or beneficiaries. We assist in providing analysis, interpretation, and beneficial assistance to achieve maximum benefit, avoiding unpleasant disputes and unfavourable and/or unfair consequences in divorce matters. Be sure to entrust your inter-vivos trust administration to our expert legal team.

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