FBE2604
ASSIGNMENT 2 SEMESTER 2 2025
UNIQUE NO.
DUE DATE: 2025
, Assignment 02 2025
Honesty Declaration: I declare that this is my own work and that all sources used have
been acknowledged.
1.1 Advice on Legality of Selling a Beneficial Interest in a Business Trust
In South African trust law, the rights of a beneficiary depend on the terms of the trust
deed. If the deed is silent on the transfer or sale of a beneficiary’s interest, the general
rule is that a beneficiary’s personal right to receive benefits is not automatically
transferable without the trustees’ consent. This is because:
Beneficiaries do not own the trust property; it is owned by the trustees in their
fiduciary capacity (see Land and Agricultural Bank of SA v Parker 2005 (2) SA 77
(SCA)).
A beneficiary has a personal right against the trustees, not a real right in the
property.
Many courts have held that, unless the trust deed expressly allows transfer, the
cession of a beneficial interest requires the trustees’ approval to protect other
beneficiaries and the trust’s objectives.
Advice: Zwane can only acquire Tshepo’s beneficial interest if the trustees (and
possibly other beneficiaries, depending on the deed) consent to the cession. Without
such consent, the sale will be legally ineffective.
1.2 Advantages of a Business Trust for Zwane
A business trust offers several potential benefits:
1. Asset protection – Trust property is separate from the personal estate of
beneficiaries and trustees, which can safeguard assets from creditors.
ASSIGNMENT 2 SEMESTER 2 2025
UNIQUE NO.
DUE DATE: 2025
, Assignment 02 2025
Honesty Declaration: I declare that this is my own work and that all sources used have
been acknowledged.
1.1 Advice on Legality of Selling a Beneficial Interest in a Business Trust
In South African trust law, the rights of a beneficiary depend on the terms of the trust
deed. If the deed is silent on the transfer or sale of a beneficiary’s interest, the general
rule is that a beneficiary’s personal right to receive benefits is not automatically
transferable without the trustees’ consent. This is because:
Beneficiaries do not own the trust property; it is owned by the trustees in their
fiduciary capacity (see Land and Agricultural Bank of SA v Parker 2005 (2) SA 77
(SCA)).
A beneficiary has a personal right against the trustees, not a real right in the
property.
Many courts have held that, unless the trust deed expressly allows transfer, the
cession of a beneficial interest requires the trustees’ approval to protect other
beneficiaries and the trust’s objectives.
Advice: Zwane can only acquire Tshepo’s beneficial interest if the trustees (and
possibly other beneficiaries, depending on the deed) consent to the cession. Without
such consent, the sale will be legally ineffective.
1.2 Advantages of a Business Trust for Zwane
A business trust offers several potential benefits:
1. Asset protection – Trust property is separate from the personal estate of
beneficiaries and trustees, which can safeguard assets from creditors.
