Wills & Trusts · 6 min read
Do I need a will, a trust, or both?
A will and a trust solve different problems. Most families need a will; some also benefit from a trust. Here's how to tell which conversation you should be having.
What a will actually does
A will is a written, signed instruction that takes effect when you die. It names who inherits, who winds up your estate (the executor), and — crucially for parents — who becomes guardian of your minor children.
Without a valid will, you die 'intestate', and the Intestate Succession Act decides who inherits, in fixed proportions that may be nothing like your wishes. The process is also slower and more expensive for the people you leave behind.
- Everyone with dependants, a home, or specific wishes needs one.
- It must be in writing and signed by you and two competent witnesses together.
- It only operates on death — it does nothing while you're alive.
What a trust adds
A trust is a structure that holds assets for the benefit of others, managed by trustees under a trust deed. Unlike a will, a trust can operate during your lifetime (an inter vivos trust) or be created in your will to take effect at death (a testamentary trust).
A testamentary trust is especially common where there are young children: rather than a large inheritance passing to a teenager outright, it is held and managed until they are old enough to handle it.
- Protects assets for minor or vulnerable beneficiaries.
- Supports continuity and control across generations.
- Can ring-fence assets from a business's risks.
The honest trade-offs of a trust
Trusts are not a tax shortcut. They are taxed at a flat 45% on retained income and at an effective 36% on capital gains — higher than most individuals — so a trust set up for tax reasons alone usually disappoints.
A trust also has real running costs and duties: independent trustees, annual financial statements, resolutions, SARS returns, and a beneficial-ownership register filed with the Master. Loan-funded trusts can also trigger 'section 7C' donations tax. The value of a trust is protection, continuity and control — not avoidance.
So — which do you need?
Almost everyone should have a valid, current will. A trust is worth exploring if you have minor or vulnerable beneficiaries, business assets to protect, or a multi-generational plan. The two work together: many estate plans use a will that creates a testamentary trust.
The right answer depends on your assets, your family and your goals. That's exactly the conversation we have with you before recommending anything.
General information, not legal, tax or financial advice. Every situation is different — speak to us before acting.