A trustee cannot act until he/she has Letters of Authority from the Master. So, the trust can do nothing until it is registered.

But that usually does not matter. Why? Because you should be registering a company as well. The trust will own the company and the company will do whatever business you are planning, whether it be trade or property investment.

If it’s trade, then you should probably have two companies, the trading company is owned by the property investment company and that company is to be owned by the trust.

Let’s say that you want to buy a property. The investment company is registered with you as the shareholder, but the trust is still sleeping at the Master’s office.

No problem, let the company go ahead with the offer to purchase. Even if it took 6 months for the trust to be registered (it’s usually about 6 – 8 weeks) and by then, the company owned the property, you can still donate the shares to the trust as they are only worth R100 or R120. “But surely,” you say, “that’s not true! The company now owns the property.”

Yes, but it also owes you and the bank the cost of the property, so its liabilities are equal to its assets and it is only worth the share capital.