What is a testamentary trust and when is one used?
A testamentary trust is created by a will and only comes into existence at death. Trustees named in the will hold and manage an inheritance for beneficiaries who cannot manage it themselves — most often minor children.
The default alternative for a minor's cash inheritance is the state-run Guardian's Fund — a trust puts that money under trustees the parent chose instead, managed on the terms the will sets.
How it comes into existence
The trust exists only as clauses in a will while the person is alive — it costs nothing and does nothing until death. When the will takes effect, the executor transfers the relevant inheritance into the trust, the Master of the High Court registers it, and the named trustees receive letters of authority to act. From that point the trust is a separate legal arrangement, holding the assets in its own right.
When one is typically used
- Minor children — a child cannot receive a large inheritance directly, and without a trust the cash portion is typically paid to the state-administered Guardian's Fund, as covered in "What happens if you die without a will in South Africa?"
- Dependants who cannot manage money — a family member with a disability, or a beneficiary the testator believed would be overwhelmed by a lump sum
- Staged inheritance — the will can hold assets in trust until a chosen age or event (finishing studies, turning 25) rather than paying everything out at 18
What the trustees do
Trustees administer the trust exactly as the will instructs: investing the assets, paying for the beneficiary's maintenance, education and needs from income or capital as the will allows, and accounting to the Master. When the age or event the will names arrives, the trust ends and the remaining assets transfer to the beneficiary.
The will chooses the trustees — a surviving parent, family members, a professional, or a combination. That choice determines who controls the money for years, which is why it carries as much weight as the inheritance itself.
Not the same as a living trust
A living (inter vivos) trust is created during a person's lifetime by a trust deed and exists immediately — assets are moved into it while the founder is alive. A testamentary trust is the opposite: created by the will, existing only after death, funded by the estate. The two serve different purposes and are often confused because both are simply called "a trust".
Costs and duties exist
A testamentary trust is not free to run once it exists: trustees may charge fees, the trust must keep records and file its own tax returns, and trustees carry legal duties of care they can be held to. These costs and duties are real — the trade-off is professional, accountable management of money a beneficiary could not manage alone.
Terms used on this page
- executor
- The person or institution appointed to wind up a deceased estate — collecting the assets, paying the debts and costs, and distributing what remains to the heirs.
Reviewed July 2026