Page 22 - Bespoke EPG 2017 Digital

Types of Trusts
1. Inter Vivos (Living) Trust: This is a trust created during the founder’s lifetime.

Established by a trust deed which sets out who the founder, trustees and
beneficiaries are, defines powers and duties of trustees and how and when
the trust is to be wound up. The founder may also be co-beneficiary and / or
trustee. The founder usually donates assets to the Trust.
2. Types of inter vivos trusts: There are various kinds of inter vivos trusts
that can be set up, depending on their purpose, for example, charity trusts
(formed with an impersonal object), empowerment or employee trusts and
business trusts
3. Testamentary Trust: This is a trust created in a Will and comes into effect
only on the death of the testator. Since the testator is also the founder, he
cannot also be co-beneficiary and / or trustee. If the Will is invalid for any
reason, the trust will not come into effect.
4. Family (private) trusts: (can be testamentary or inter vivos). The main object
is the protection and maintenance of trust property, for the benefit of minor
children, or family relations of the founder.
5. Special trusts: Section 1 of the Income Tax Act defines two types of special
trust:
a. Special trust for incapacitated persons: This is a trust created for the

maintenance and care of a person with a mental illness (as defined
in the Mental Health Care Act) or any serious physical disability which
precludes him from earning income, or managing his own affairs, or
b. A testamentary trust: This is a trust created by a testator by or in terms
of his Will solely for the maintenance and care of his relatives who are
alive on the date of death of the deceased (including any beneficiary who
has been conceived but not yet born on that date), where the youngest
of those beneficiaries is on the last day of the year of assessment of that
trust, under the age of 18 years.

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