Essentials of a valid trust

Question 1

The SA law of trusts is a mixture of

Answer 1

Common-law principles and statutory requirements.

Question 2

Essential elements for creation of a valid trust:

Answer 2

1. Must be a intention of the founder to create a trust
2. Object of the trust must be lawful
3. Trust property must be defined with certainty
4. Trust property must be bequeathd to trustees
5. Binding obligation on the trustees to administer trust assets.
6. In case of testamentary trusts: formalities of of valid will must be complied with.

Question 3

Consequences if a valid trust has been created:

Answer 3

1. Control and ownership has been passed from founder to trustees.
2. Trustees have certain obligations once trust is established
3. Beneficiaries have certain rights
4. Beneficiaries or planner do not control the trust or assets.

Question 4

It is clear from recent legal judgements that one of the key requirements for a valid trust is that the must be:

Answer 4

a separation of ownership from control.

Question 5

'’Invite abuses’’

Answer 5

The sole trustees of a trust is also the beneficiaries - will not be tolerated by the court.