A trust is a legal entity formed by a donor (settlor), administered by Trustees on behalf of the nominated beneficiaries.

The are two different types of Trusts, namely a Testamentary Trust and an inter vivos Trust. The first mentioned is a Trust which is formed upon the Donor's death. Such a Trust is contained in the Donor's will and its primary purpose is to ensure that the Donor's loved ones are well taken care of after he/she has passed on. The latter mentioned is what is known as a "living trust". It means that the Trust is established while the Donor is still alive for the benefit of the nominated beneficiaries or even the donor himself. The Donor him/herself may also be part of the Trustees.

A Trust may be used for the following purposes:

• Special Trusts;
• Charitable Trusts;
• Asset protection trusts;
• Financial security for nominated beneficiaries after donor's death;
• Financial security for nominated beneficiaries during the donor's lifetime.

The First step in forming a Trust is by way of instructing an attorney to draft a Trust Deed with all the necessary information be contained therein;
The Second step is to gather an amount of R250.00 and pay same into the relevant Master's office;
The Third step is to have the letters of acceptance of Trusteeship by all the trustees of the Trust, and also thereby added the experience they have in acting as trustees and copies of their identity documents;
The Fourth step is to also have an affidavit from the independent trustee;
The Fifth step is having a beneficiary declaration document;
The Sixth step is having an undertaking by an auditor or accountant in order to administer the financial side of the Trust;
The Seventh step is by having an undertaking and bond of security;
The last step is submitting all the above mentioned documents, together with the proof of payment to the Master's of the High Court's office within the jurisdictional area where the Donor resides.

Thereafter, letters of authority will be issued to the trustees and they will then be in a position to act on behalf of the Trust. It is very much advisable to appoint Trustees who has experience in administering Trusts or a Trustee with educational background, because Trustees can be held personally held liable for contravention of any law of any Trust maladministration.

However, the other side of a Trust is that it has certain Tax implications which one should discuss with a Tax financial advisor in order to have a broader view pertaining to the administration of Trusts and their respective tax implications.