Trusts in South Africa: Ensure Your Assets Are Safe

Trusts in South Africa: Ensure Your Assets Are Safe

There are generally 3 types of Trusts In South Africa.
1. Testamentary Trust;
2. Inter-vivos Trusts (Usually Family Trusts created by the Founder);
3. Business Trusts
This article will focus on Testamentary Trusts as well as Inter-vivos Trusts.
Testamentary Trusts:
This is a Trust that is set up in your Will and Testament, but comes into effect upon your passing away.
An individual may set up a Trust in terms of their Will and Testament. This is a particularly good idea if you wish to leave assets to minors or persons who are not capable of looking after themselves or handling funds well (minors may not inherit or own property until they are adults. Thus, should you leave anything to a minor, the funds will be paid to the Guardian’s Fund and paid to the child upon reaching adult hood).
It is strongly advised that one consults a knowledgeable attorney in the field of Wills and Testaments to discuss the best options for you, after proper analysis of your unique needs. Your attorney should conduct a consultation with you and provide you with a variety of options and consequences of different types of wills. For more information on Consultations and what to expect please see our blog at https://www.hamelattorneys.co.za/divorce-how-do-i-know-i-can-trust-my-attorney/
Feel free to contact us to set up a consultation at https://www.hamelattorneys.co.za/contact/ or telephone us on 012 754 3385
Inter-vivos Trusts (Usually Family Trusts created by the Founder):
In this type of Trust an individual (the Founder) transfers ownership of his/her assets to the Trust to be held for the benefit of the Beneficiaries of the Trust, during the life time of the Founder.
The Founder would usually remain the Trustee together with an independent Third Party such as their attorney or auditor etc. The Founder may also be a beneficiary of the Trust together with other beneficiaries (such as your children).

The Trust itself is created by a document which indicates who the Trustees are as well as who the beneficiaries are and usually sets out how income may be received by the Beneficiaries and the powers of the Trustees.

 

A Trust is a wonderful instrument to legally protect your assets and ensure that your beneficiaries enjoy the fruits of the assets under the circumstances as set out in the Trust Deed.

 

Trusts must be Registered at the Master’s office by your attorney or yourself. There are certain documents that must be completed and signed, in addition to the Trust Deed itself. If these documents are not signed or not all the documents are completed, the Master may refuse to register your Trust. The Master may also refuse to Register your Trust if the Trust Deed does not comply with certain standards.

 

Once your Trust has been Registered, the Master will provide a Letter of Appointment, indicating the Trustees, to your attorney. Without this Letter of Executorship, one cannot make any decisions or transfer assets legally to the Trust etc, as this Letter of Appointment will be required by banks and SARS as well as any other relevant institution.

 

It is important as well to obtain adequate legal tax advice from your attorney so as to ensure that you may receive the relevant tax breaks and be aware of the tax and other implications of your Trust.

 

It is thus of paramount importance that you consult with an attorney regarding whether a Trust is the right option for you and if it is, how to go about wording your Trust Deed correctly, depending on your specific and unique needs.

 

Contact us today to set up your consultation at https://www.hamelattorneys.co.za/contact/ or on 012 754 3385. Our consultations may be done in person (after lock-down) or at any time, with set appointment online via Skype.

Related posts