A testamentary trust — also known as a will trust — is a trust created in terms of a will. According to Anne Klein, senior manager at Maitland and a member of the Fiduciary Institute of South Africa (Fisa), a testamentary trust only comes into force on the death of the testator and is subject to the terms and conditions of the will (we’ll explain how this differs from an inter vivos trust next week).
A testamentary trust within a correctly structured will is a useful tool to protect minor children’s inheritances, or persons suffering from disabilities. Although the testator shouldn’t “rule from the grave”, a properly drafted will should provide for the nomination of trustees and define their specific powers and responsibilities.
A testamentary trust should also contain clauses to define how a trust income and capital should be used and invested. The testator could also nominate a guardian for minor children, if this is required.
Klein says you should always look at your own unique circumstances to see if a trust is essential. She recommends that you sit down with a Fisa-listed member, who can advise you properly. You can see a list of members here: www.fidsa.org.za
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