FAQ on Property trusts , testamentary and living inter vivos trusts
ASK THE EXPERTS
FAQ on Property trusts , testamentary and living inter vivos trusts
ANNEMARIE SCHUTTE Treasury Trust Services ( TTS ) - Destinata Holdings
I
have am exploring setting up a trust structure and have questions around amending the Trust Deed , making provision for amendments and the difference between a living ( inter vivos ) and testamentary Trust ?
Trusts have a multitude of uses , and we ' re here to unravel the mysteries surrounding Trust setups .
1 . Can I amend my Trust Deed ? Yes , you can . According to common law , the Trust Deed serves as a contract between the Founder and Trustees , with the Beneficiaries , who are seen as the “ third-party ”. This means that the parties involved - the Founder and Trustees - have the ability to make amendments through a mutual agreement , as long as they are following the principles of the Law of Contract .
To amend the Trust Deed , the consent of all parties who have signed the contract is generally required , unless the Trust Deed specifies otherwise . It ' s important to note that beneficiaries who have previously accepted benefits are also considered as parties who have signed the contract , and thus their agreement becomes part of the amendment process .
Depending on the type of amendment , your Trust Advisor will either prepare a replacement Trust Deed or a Resolution containing the clause amendments .
2 . What if My Trust Deed does not make provision for amendments , can I still amend it ? Yes , the general rule is that where the Trust Deed does not contain a variation clause , the Trustees will still be able to amend the Trust Deed , in terms of the Law of contract – the original parties to the contract ( Trust Deed ), may amend the Trust Deed .
If the Founder is not alive , the Trustees in office along with the Beneficiaries who have accepted any benefits from Trust , must consent to the amendment .
3 . My Trust Deed prohibits amendments , what do I do ? It is important to have your Trust Deed reviewed by a specialist like TTS Trust Advisors , whereafter your will receive recommendations regarding amendments to ensure your Trust Deed is in line with our laws . Amendments will then occur in two stages :
First , prohibition clause needs to be amended ( by mutual agreement between the Founder ( if still alive ),
13 MAY / JUNE 2023 SA Real Estate Investor Magazine