, FBE2604 Assignment 2 (COMPLETE ANSWERS) Semester
1 2026 - DUE 13 April 2026; 100% Correct solutions and
explanations.
QUESTION 1
1.1 Type of trust suitable for Joanne and the elements of a valid
trust
(A) Type of trust suitable for Joanne
The most suitable trust for Joanne’s situation is an inter vivos trust
(living trust). An inter vivos trust is created during the lifetime of the
founder and comes into operation once it has been properly established.
It is created by means of a trust deed in which the founder sets out the
terms and conditions of the trust.
This type of trust is appropriate for the following reasons:
1. Protection of minor beneficiaries
Samantha and Thabo are both minors. In law, minors have limited
legal capacity and are generally unable to manage substantial
assets independently. By placing the assets in an inter vivos trust,
Joanne ensures that the assets are professionally managed and
safeguarded until the children reach the age of 18.
2. Separation of control and benefit
Joanne wishes to confer ownership of the trust assets on her
children but place control in the hands of Fatima as trustee. This
separation between ownership (beneficiaries) and control (trustee)
is a fundamental feature of a trust. The trustee administers and
controls the assets, while the beneficiaries enjoy the benefits of the
trust property.
3. Certainty and structured administration
A written trust deed will clearly outline:
o The powers and duties of Fatima as trustee.
1 2026 - DUE 13 April 2026; 100% Correct solutions and
explanations.
QUESTION 1
1.1 Type of trust suitable for Joanne and the elements of a valid
trust
(A) Type of trust suitable for Joanne
The most suitable trust for Joanne’s situation is an inter vivos trust
(living trust). An inter vivos trust is created during the lifetime of the
founder and comes into operation once it has been properly established.
It is created by means of a trust deed in which the founder sets out the
terms and conditions of the trust.
This type of trust is appropriate for the following reasons:
1. Protection of minor beneficiaries
Samantha and Thabo are both minors. In law, minors have limited
legal capacity and are generally unable to manage substantial
assets independently. By placing the assets in an inter vivos trust,
Joanne ensures that the assets are professionally managed and
safeguarded until the children reach the age of 18.
2. Separation of control and benefit
Joanne wishes to confer ownership of the trust assets on her
children but place control in the hands of Fatima as trustee. This
separation between ownership (beneficiaries) and control (trustee)
is a fundamental feature of a trust. The trustee administers and
controls the assets, while the beneficiaries enjoy the benefits of the
trust property.
3. Certainty and structured administration
A written trust deed will clearly outline:
o The powers and duties of Fatima as trustee.
