Drafting of Trusts
Based on the method and the time of its creation and time of its application trusts can be divided into two main groups, namely mortis causa trusts and inter vivos trusts.
A mortis causa or testamentary trust is created when a testator bequeaths property to a trustee in his will to be held and administered in favour of nominated beneficiaries. The trust only comes into being on the death of the testator.
An inter vivos trust is created by way of an agreement (a deed of trust or an antenuptial contract) between the founder and the trustee, whereby the founder during his lifetime transfers property to the trustee in favour of nominated beneficiaries.
Trusts have several advantages to consider which include separation of estates, estate duty, income tax, donation tax, inheritance of minors to only name a few.