Trusts
What is a trust?
A trust is an agreement between an owner of assets and trustees. In terms of this agreement, the trustees undertake that they will administer the trust's assets with the necessary care to the benefit of the beneficiaries. It is an efficient and flexible way to ensure that assets are looked after. It also ensures that assets are objectively managed and controlled by appointed trustees in the best interests of the beneficiaries.
The protection of your loved ones' financial interests is extremely important in the planning of your estate. You want to be sure that your family, and especially minors, will be looked after, and that your estate and income tax obligations are kept as low as possible, so that your heirs can enjoy the full benefit of your estate.
It is paramount to appoint the right trustees. You have to trust that the trustees will always act in the best interests of the beneficiaries and that the trust will be managed in accordance with legislation and stipulations of a trust act.
A trust's administration must be transparent to ensure the satisfaction of all concerned.
Who Needs Trusts?
1. Minors. If a minor is heir to an estate where there is no will, or if there is a will but no trust clause, the inheritance must be paid into the Guardians' Fund of the Master of the High Court. The same happens in the event of a minor being the beneficiary to the death benefits of a policy.
2. Persons who cannot take care of their own affairs. If persons are not able to take care of their own affairs due to physical and/or mental conditions, their assets must be placed under the protection of a curator. The Master of the High Court will give permission for all expenses as well as the types of investments made.
3. In case of indivisible assets. Certain assets may, owing to their nature or because of circumstances, not be transferred to more than one person. For example, the Sub-division of Agricultural Land Act, Act 70/1970, currently stipulates that agricultural land may not be sub-divided without the authorisation of the Minister of Agriculture.
4. To effect tax savings. Such as in the case of:
5. If your assets grow faster than inflation. Certain investments, such as shares, unit trusts and market-related policies, have the potential to grow faster than inflation. If the assets are retained in your own hands, it could result in estate duty. Such assets should preferably be in a trust in order to keep the growth out of your own estate.
6. If your family composition is complex. If you are divorced, or if you want to keep certain assets in your family, it could complicate inheritances and make your will very complex. This could result in unnecessary delays in settling your estate.
7. To protect assets. A trust could be structured in such a way that it does not vest in your hands and will therefore not form part of your estate. In the event of your insolvency, creditors will not be able to lay claim to these assets.
Contact us to arrange a meeting or to obtain more information and/or a quotation.
A trust is an agreement between an owner of assets and trustees. In terms of this agreement, the trustees undertake that they will administer the trust's assets with the necessary care to the benefit of the beneficiaries. It is an efficient and flexible way to ensure that assets are looked after. It also ensures that assets are objectively managed and controlled by appointed trustees in the best interests of the beneficiaries.
The protection of your loved ones' financial interests is extremely important in the planning of your estate. You want to be sure that your family, and especially minors, will be looked after, and that your estate and income tax obligations are kept as low as possible, so that your heirs can enjoy the full benefit of your estate.
It is paramount to appoint the right trustees. You have to trust that the trustees will always act in the best interests of the beneficiaries and that the trust will be managed in accordance with legislation and stipulations of a trust act.
A trust's administration must be transparent to ensure the satisfaction of all concerned.
Who Needs Trusts?
1. Minors. If a minor is heir to an estate where there is no will, or if there is a will but no trust clause, the inheritance must be paid into the Guardians' Fund of the Master of the High Court. The same happens in the event of a minor being the beneficiary to the death benefits of a policy.
2. Persons who cannot take care of their own affairs. If persons are not able to take care of their own affairs due to physical and/or mental conditions, their assets must be placed under the protection of a curator. The Master of the High Court will give permission for all expenses as well as the types of investments made.
3. In case of indivisible assets. Certain assets may, owing to their nature or because of circumstances, not be transferred to more than one person. For example, the Sub-division of Agricultural Land Act, Act 70/1970, currently stipulates that agricultural land may not be sub-divided without the authorisation of the Minister of Agriculture.
4. To effect tax savings. Such as in the case of:
- Estate duty
- Capital gains tax
- Income tax
5. If your assets grow faster than inflation. Certain investments, such as shares, unit trusts and market-related policies, have the potential to grow faster than inflation. If the assets are retained in your own hands, it could result in estate duty. Such assets should preferably be in a trust in order to keep the growth out of your own estate.
6. If your family composition is complex. If you are divorced, or if you want to keep certain assets in your family, it could complicate inheritances and make your will very complex. This could result in unnecessary delays in settling your estate.
7. To protect assets. A trust could be structured in such a way that it does not vest in your hands and will therefore not form part of your estate. In the event of your insolvency, creditors will not be able to lay claim to these assets.
Contact us to arrange a meeting or to obtain more information and/or a quotation.
