Trusts


We strive to protect and grow the assets and wealth of our clients during their lifetime and, in the unfortunate event of death, we will continue to protect and grow the inheritance of our clients' loved ones thereby ensuring the wealth and legacy of the next generation.

Trust Services
  • Management of Living Trust (Inter Vivos) or Trust by Will as nominated Trustee, Co-Trustee or agent for the Trustee.
  • Planning, creating, registering and implementing of Living Trusts.
  • General information and advice relating to Testamentary and Living Trusts.
  • Acting as Agent under Special Power of Attorney for persons incapable of managing their own affairs due to old age and/or medical conditions.
  • Management in Trust of pension fund, retirement fund and/or Group Life assurance lump sum benefits payable upon death of the member for the benefit of his/her dependents.
  • Creating Policy Trusts (Living Trust) in respect of life assurance policies payable to nominated beneficiaries.
  • Creating specific purpose Trusts.
What is a Trust?

A Trust is a legal entity with its own identity. It may acquire, hold and sell property, shares and other assets.

A Trust is an arrangement under which assets are set aside by an individual and administered by a trustee for the benefit of another person.

Why should I create a Trust?

The purpose of a trust is to protect your assets.
  • Inter-Vivos (Living Trust)
    An Inter Vivos Trust is created in terms of a Trust Deed. The assets vested in the Trust are separated from the beneficiary’s personal estate. In the event of a creditor’s claim against a personal estate, the assets in a well structured Trust cannot be attacked by creditors (some exceptions do occur). An Inter Vivos Trust also allows for the growth of your assets to occur in the Trust and not in your personal estate, which allows for major savings in estate duty, executor’s fees and capital gains tax, payable upon your death.
  • Testamentary Trust
    A Testamentary Trust is created in terms of a Will of a deceased person, usually for the benefit of minor and/or vulnerable heirs. The Trust will own the assets until *termination of the Trust (which is a specific date chosen by the Testator/Testatrix, i.e. until minor beneficiary attains the age of 21, 25/until a beneficiary had completed his/her studies, etc).
What are the Benefits of a Trust?

Testamentary Trust
  • In the event of your death, any inheritance payable to a *minor heir, where no Testamentary Trust is in place, will be paid to the *Guardian’s Fund to be administered until the heir attains the age of 18.  In most cases, all the assets will be converted to cash.  Only in extreme cases (and with extreme measures) will the Guardian’s Fund accept the transfer of a fixed asset.
  • In the event where there are major children from a previous marriage, it allows for the income of the Trust to be utilised for the maintenance of a spouse (known as the *Income Beneficiary) from a second marriage, while protecting the capital of the Trust for the ultimate beneficiaries (known as the *Capital Beneficiaries).
  • A Testamentary Trust can be utilised to protect the inheritance of a vulnerable spouse/heir.
  • A Testamentary Trust will qualify to be registered as a Special Trust with SA Revenue Services if:
    • Special Trust A:  Trust is created solely for the benefit of a person who suffers from any illness as defined in Section 1 of the Mental Health Act or any serious physical disability, where such illness or disability incapacitates such person from earning sufficient income for the maintenance of such person.
    • Special Trust B:  Trust created solely for the benefit of beneficiaries who are relatives in relation to the deceased person and who are alive on the date of death of the deceased person (including any beneficiary who has been conceived but not yet born) and where the youngest of those beneficiaries are, on the last day of the a tax year, under the age of 21.
Special Trusts qualifies for tax advantages (income tax and capital gains tax) as these trusts are mostly taxed at the rates applicable to individuals (exceptions do occur).

Inter Vivos Trust (Living Trust)

A well-formed and administered Trust will:
  • Allow for true estate planning, when formed and administered by knowledgeable trustees, who will manage and control the assets as per your instructions, duly captured in the Trust Deed.  This ensures that your wishes are duly met, during your lifetime and after your death.
  • Asset growth occurs in the trust and not in your own estate, limiting the net value of your estate and thereby ensuring saving on amount payable for estate duty, executor’s fees and/or capital gains taxes payable upon death.
  • Tax planning tool.
  • Allows for the ongoing management of your assets in the event of your death.  A trust cannot die and therefore a capital gain event will only occur when the trust does terminate (usually in the discretion of the Trustees).  This is particularly useful with a business arrangement/share portfolio/other market related investment, where the value could be lost by selling/converting to cash on a specific date (i.e. date of death).  If said investments are owned by the Trust, the Trustee will have the discretion to sell/convert to cash when it is most advantageous to do so.
  • Allows for the protection of your assets from creditors and/or claims from any legal consequences of any existing or future marriage of a beneficiary, whether contracted in or out of community of property (exceptions do occur).
  • Allows for the protection of the assets against a spendthrift spouse and/or any other beneficiary.
  • Allows for the protection of a vulnerable spouse and/or child, particularly if the spouse or child is unable to manage his/her own financial affairs for any reason whatsoever.
  • Assures access to income and, if in need, to the capital of the Trust at all times – assets will not be frozen upon the death of the founder and/or any of its beneficiaries.
  • Allows for multi-ownership of assets (such as a business, a farm or other property).
  • Allows for confidentiality.  On your death your Will becomes a public document and can therefore be viewed by any party.  This does not apply to a Trust and therefore the Trust’s information remains confidential.
Glossary

  • Minor heir – in terms of current legislation any heir under the age of 18 is considered a minor.
  • Guardian’s Fund – The Guardian’s Fund falls under the administration of the Master of the High Court.  It is a fund created to hold and administer funds on behalf of various persons, including minors, unborn heirs, missing or absent persons, etc.
  • Income Beneficiary – person who will benefit from the income of the Trust.
  • Capital Beneficiary – person who will ultimately inherit the capital of the Trust.
  • Termination:
    • Testamentary Trust - termination date is a specific date chosen by Testator/Testatrix whereupon the Trust must terminate and the assets duly made over and/or paid to the Capital Beneficiary/ies.
    • Inter Vivos Trust – termination date can be a specific date chosen by the Founder of the Trust whereupon the Trust must terminate and the assets duly made over and/or paid to the Capital Beneficiaries.  The Founder may also allow for a specific date to be chosen by the Trustees, when unanimously decided (discretionary termination).

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Efficient BOE Inter Vivos Trust Application


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