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072 855 8106 nanika@nanikalaw.co.za

Truts

Protect Assets: 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

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 a Director of a Company

The Trust Deed prescribes what a Trustee can do or not do

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 41% tax.

TRUSTS ARE A TOOL TO DO BUSINESS AFTER SEQUESTRATION

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

A sequestrated person also does not want to hold assets in his or her own name after date of sequestration.

A trust can be used to overcome these problems

TRUSTS PAY 41% 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 Trusts

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 Trusts 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.

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.

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.

We will coach you on how to use your Trust to your benefit

Tel- 010 286 1966
Fax- 012 663 5627
Cell- 072 855 8106
nanika@nanikalaw.co.za

Fairview Golf Village
St Andrews Drive
Gordon’s Bay 7140

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