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Who needs
a Trust?

A trust offers an efficient and flexible way to ensure that your assets are preserved and objectively managed and controlled by appointed trustees in the best interest of your beneficiaries.

Each person’s needs are individual and unique and your trust should be planned to meet your specific requirements.


Minors

If a minor is an 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.

Persons who cannot take care of their own affairs

If people are unable to take care of their own affairs due to physical 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.

Other instances where a trust can be used to good effect:

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.

To effect tax savings in the case of:

  • Estate duty
  • Estate duty assets transferred to a trust no longer form part of your own estate. This effectively means that all the growth in the assets occur in the trust, and not in your own estate, which effects a tax saving in the long term.
  • Capital gains tax
  • Although capital gains tax is higher in a trust, a trust remains an excellent estate planning instrument. There are ways of deferring the capital gains tax on a trust asset to the trust beneficiaries, with the result that capital gains tax can then be levied at an individual rate.
  • Income tax
  • If non-allocated income may be capitalised in a trust, the trust will pay income tax at the present rate of 41%. All income paid out to income beneficiaries will be taxable in their hands at their normal income tax rate.

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.

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.

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.

Trust Focus

  • 7B World House, Loerie Park, Paul Kruger Street, Durbanville, Cape Town
  • Tel: +27 (0) 21 979 2501
  • Fax: +27 (0) 21 979 2505
  • Email: admin@trustfocus.co.za
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