South African trust law is based on the law of contract and particularly stipulatio alteri. This means the SA Trustee enters into an agreement with a settlor to hold trust assets for the benefit of the beneficiaries of the trust. This position is very different to the common law trusts of Guernsey and Jersey ("CI Trusts"), which are underpined by equitable principles. In CI Trusts, the legal title of the property is held in the name of the trustee who has a legally enforceable obligation to the beneficiaries of the trust to comply with the terms of the trust and act in the best interests of the beneficiaries. CI Trusts, unlike a SA Trust, are not registered with any local authority and come into force once the trust deed is executed.

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Article originally published May 2020

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