No. A family trust is not a legal requirement and is not the right solution for every family. Whether it adds value depends on the assets involved, the family structure, the planning objectives and the willingness to meet the trust’s ongoing governance and tax obligations.

For many people, a properly drafted will, suitable beneficiary nominations, appropriate insurance and, where necessary, a testamentary trust can address the main estate planning risks without the cost and administration of an inter vivos trust. A family trust becomes more relevant where there is a genuine need for long-term asset management, provision for dependants, succession of family or business assets, or separation of assets from personal ownership.

A trust also needs to be administered as a real fiduciary arrangement. Trustees must comply with the deed, act jointly where required, keep appropriate records, keep trust property separate, meet SARS obligations and maintain beneficial ownership information with the Master. A trust that exists only on paper, while one person continues to treat the assets as personal property, can create significant legal and tax risk.

See also: What are the disadvantages of a family trust? | What is the minimum amount for a family trust?

Disclaimer: The information provided here is intended as general guidance only and does not constitute legal, tax, or financial advice. Every situation is unique, and legislation is subject to change. We invite you to reach out to our team at Wealth and Legacy Group for guidance tailored to your specific circumstances.