A South African trust is a legal arrangement in which a person transfers assets to be administered by others for the benefit of designated beneficiaries. Although a trust is not a separate legal person in the same way as a company, it is recognised as a distinct legal entity for certain purposes. The functioning of a trust depends on three core parties: the founder, the trustees, and the beneficiaries..

The founder (also called the settlor or donor) is the person who creates the trust. The founder may donate or settle the initial assets into the trust. Once the trust is established and assets are transferred, the founder generally relinquishes control, unless specific powers are reserved in the trust deed. However, excessive retention of control can undermine the validity or independence of the trust..

The trustees are the persons appointed to administer and control the trust property. They hold legal title to the trust assets, not for their own benefit, but in a fiduciary capacity for the benefit of the beneficiaries. Trustees must act with care, diligence, and skill, and always in accordance with the trust deed and the Trust Property Control Act 57 of 1988. Their duties include safeguarding trust assets, making investment decisions, keeping proper records, and distributing income or capital as prescribed. Trustees must act jointly unless the trust deed provides otherwise, and they may not act in their own personal interests where these conflict with their fiduciary obligations..

The beneficiaries are the persons or entities who are entitled to benefit from the trust. Their rights depend on the type of trust and the provisions of the trust deed. In a vested trust, beneficiaries have a fixed right to income or capital. In a discretionary trust, trustees have the power to decide whether and when beneficiaries receive benefits. Beneficiaries do not own the trust property; instead, they hold personal rights against the trustees to ensure proper administration of the trust in accordance with the deed and the law..

In summary, the founder establishes the trust and defines its framework, the trustees administer and control the trust property in a fiduciary capacity, and the beneficiaries receive the benefits arising from the trust. The separation of ownership (trustees) and enjoyment (beneficiaries) is fundamental to the trust structure in South African law.