Testamentary trusts, also known as will trusts, are established after the death of the person who created them. They are typically used to protect the interests of minors or other dependents who are unable to manage their own affairs. In South Africa, testamentary trusts are commonly set up to hold assets on behalf of minor children who are unable to inherit under the law.
To establish a testamentary trust, the person creating the trust must include specific language in their will indicating that a trust should be created. The terms of the trust are typically less detailed than those of an inter vivos trust.
Sometimes, a separate trust deed may be attached to the will to provide additional assurance that the testator's wishes will be honored.Trustees are appointed by the person creating the trust and typically serve until a predetermined date, such as when a minor turns eighteen or upon the death of an income beneficiary.
It is common to appoint a financially astute individual as a trustee to provide a check and balance on the child's guardian.If the will is found to be invalid, the trust will not come into effect. Unlike inter vivos trusts, the Master of the High Court has the power to declare a testamentary trust invalid.
During the estate settlement process, the appointed trustees must apply for a letter of authorization from the office of the Master of the High Court where the estate is registered. Generally, the terms of a will trust cannot be amended, but the Court does have certain powers to amend this type of trust instrument under the Trust Property Control Act.
