Trusts today Still Relevant or Time to Rethink? By Costas Souris - Quality Group
For decades, trusts have been positioned as the cornerstone of estate planning in South Africa. They have been sold as protection, tax efficiency, and generational continuity — and in many cases, rightly so.
but the world has changed
Today, investors are global. Wealth is mobile. And the questions clients are asking are sharper: Do trusts still make sense? Are they necessary? Or are there better ways to structure wealth in 2026 and beyond?
The answer is not binary. Trusts still have a role — but only when used correctly and for the right reasons.
Understanding the Role of a Trust
At its core, a trust separates ownership, control, and benefit. It is not an investment — it is a structure.
A well-designed trust acts as a long-term governance system, allowing wealth to move across generations without disruption. This is critical at a time when we are seeing the largest intergenerational wealth transfer in history.
Yet, most family wealth does not survive beyond two or three generations. The failure is rarely investment performance. It is structure, discipline, and decision-making.
Trusts were designed to solve exactly that problem.
Where Trusts Still Add Value
When used properly, trusts offer real and meaningful advantages:
Continuity: The structure survives the individual, allowing assets to remain invested and intact
Estate efficiency: Assets can sit outside the personal estate, reducing friction such as estate duty and executor delays
Liquidity protection: Prevents forced sale of assets like property or businesses
control beyond your lifetime
Asset protection: Shields wealth from certain risks, depending on structure and governance
Controlled distributions: Ensures beneficiaries receive wealth responsibly over time
In essence, a trust is not about tax. It is about control beyond your lifetime.
The Problem: Poorly Structured Trusts
However, many South African trusts were created for the wrong reasons — primarily tax.
Today, these structures are under pressure:
High tax rates within trusts
Section 7C and donations tax implications
Administrative and compliance burdens
Founder-controlled trusts that fail legal tests
the reality is simple: A poorly run trust destroys value
And in many cases, clients would have been better off without one.
Do Trusts Still Have a Role?
Yes — but they are no longer the default.
Trusts are most effective when:
There is a clear multi-generational strategy
The asset base is meaningful and growing
There is risk exposure (business or professional)
Beneficiaries require guidance or protection
They are less effective when:
Used purely for tax
The founder wants full control
The structure is not actively managed
A trust must solve a problem. If there is no problem, there should be no trust.
Modern Alternatives and Enhancements
Investors today have more options:
Offshore investing for currency protection and global growth
Endowments and wrappers for tax efficiency within simpler structures
Corporate vehicles for business and investment continuity
But the real shift is not choosing one over the other.
solution is integration …
The Modern Approach: Structure + Currency + Income
At Quality Group, we increasingly see the most effective strategies combining:
Trust structures for governance and succession
Hard currency investments for stability and purchasing power
Predictable income assets to fund lifestyle and reinvestment
This creates a layered approach:
Protect the structure
Protect the currency
Grow the capital
Should You Go Offshore Instead?
This is the wrong question.
The right question is: How do I combine structure and geography to protect my future?
Offshore investing without structure creates risk. Trusts without global exposure create limitation.
The solution is both.
Conclusion
Trusts are not outdated. But they are misunderstood.
They are not tax tools. They are not shortcuts. They are not for everyone.
They are precision instruments for families who want their wealth to outlive them — and to survive the next generation.
Because ultimately Wealth transfer is inevitable. Preservation is a choice. Connect with us: https://qualitygroupsa.com/connect/
