Trusts2018-10-23T13:25:44+00:00

TRUSTS

WHAT IS A TRUSTS?

A trust can protect your assets, because the trust become the owner of your assets and not you.

This means your creditors cannot get to your assets as it then no longer belongs to you

A trust is also a great tool to use to continue with business after sequestration

HOW DOES A TRUST WORK

A DONOR

A Trust needs a Donor to donate
something to create the trust, usually R100

A Trust Deed is registered and the Trust is created

The Trust gets its own registration number

 

BENEFICIARY

A Trust exists for the benefit Beneficiaries

A Beneficiary of a trust can be any person of any age

The Donor chooses the Beneficiares

TRUSTEES

Trustees are appointed by the Donor to manage the Trust

A trustee is similar to the Director of Company,

and must act in accordance with the Trust Deed.

OWNERSHIP OF THE ASSETS

The Trust is the owner of the assets, but only until a Beneficiary becomes entitled to the assets.

At this point the assets are transferred to the Beneficiary and then the Beneficiary becomes the owner.

The trust will in this case not pay the tax so it will not pay 45% tax.

TRUSTS ARE A GREAT TOOL TO DO BUSINESS WITH AFTER SEQUESTRATION

If you are sequestrated you cannot be a director of a company or member of a close corporation.

a sequestrated person can hold assets in a trust to overcome these problems and to avoid the assets to be attached by the curator

TRUSTS PAYS 45% INCOME TAX?

Indeed, but only on assets that the Trust keeps.

It is possible to overcome this problem if the Trusts is managed well.

We have the experience to advise you on this.

Contact us now for a discussion.

TYPES OF TRUST

FAMILY TRUSTS

Family Trust is used to mainly protect assets.

A Family Trust usually has the family members as the Trustees and Beneficiaries.

A Family Trust is also referred to as a “discretionary trust” which means that the Trustees has the discretion to transfer assets to a Beneficiary or not.

This makes it a valuable tool in tax planning”.

SPECIAL TRUSTS FOR MINOR CHILDREN

A Special Trust will protect the financial interest of the Beneficiaries.

Special Trusts are usually created for children under 18 or persons with disabilities.

Special Trust enjoy certain tax benefits.

The trust must be managed in a certain way otherwise one can lose the tax benefit that is afforded to special trusts.

PROTECTION OF ASSETS

A Trust is an excellent mechanism to protect your assets where creditors cannot get to them.

If a Trust is managed well, you can do better business or be less worried about your creditors because you will know your assets are safe.

The Trust will own the assets and not you. if the Trust did sign surety for your debt, creditors cannot attach the assets of the Trust.

Let’s see if that fits if it doesn’t we will fix it. 

BUSINESS TRUSTS

A Business Trust is used to do business with instead of a Company or Close Corporation.

Business Trusts are generally not used by a family who simply wants to hold their assets in a separate entity,

but used by business owners as a specific mechanism to do business with.

This is usually a trust for big business owners as it is used purely for business.

HOW IS A TRUST REGISTERED

We obtain the required information from you and draft the documentation that is required.
We then arrange signature with you and lodge the documents at the Master of the High Court, who will issue a Letter of Authority which will state the names of the Trustees and the registration number of the Trust.

INTER VIVOS TRUST VERSUS A TESTAMENTARY TRUST

An inter vivos (in life) trust is registered during a person’s lifetime.
It is a very good mechanism to protect assets, reduce tax liabilities and estate duties after death.
In business, a trust ensures continuity, because if the trust hold the shares of a company or the membership of a close corporation, if a member or shareholder dies, the death does not affect the business as the trust is not affected by the death of a trustee or a beneficiary (unless there is only one beneficiary of courses).

A testamentary trust is created in a will and this trust is only registered after the death of the testator or testatrix.
Testamentary trusts are usually created in a will to make provision for minor children that stand to inherit from the testator or testatrix. Trusts can also be created in wills for other reasons, such as nature conservation or charity. Each will is unique and depending on the requirements of the person making the will, the instructions regarding the registration of a testamentary trust will be contained in the will itself.

WE WILL ADVISE YOU ON THE BEST TRUST TO REGISTER

We understand the process well.

F.A.Q

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