This Youth Month, we celebrate the aspirations and ambitions influencing the future of South Africa’s youth. A wonderful gift parents and grandparents can leave behind is a legacy through property investments. Wealth is created through building a property portfolio, and these assets will help your loved ones even when you are gone. It is important to note that passing wealth to the next generation requires planning, the correct structures, and a long-term strategy.
It is here that IGrow Trusts plays a pivotal role in aiding our investors to leave a legacy that lasts generations.
Why does intergenerational wealth matter?
A lot of South Africans work hard to purchase assets like property. If you don’t have the right estate planning in place, your assets can be subject to estate costs, administration-related delays, and family disagreements.
Intergenerational wealth is becoming popular with families looking for a means to transfer assets smoothly. They also try to ensure their assets’ value is safe for future generations. Transferring wealth requires strategy, financial education, and a structure that supports long-term vision.
In South Africa, estate planning highlights the relevance of structures that reduce estate costs and ensure the estate continues to run smoothly when the trust founder passes away. (Source)
The challenges of traditional estate planning
A large number of investors hold their properties under their personal name. This appears straightforward, but it can be challenging when the owner passes away.
Assets held under a personal name become part of the deceased estate and may require estate duty and admin costs. This slows down the winding-up of the estate. Unfortunately, assets and income can be frozen, placing strain on those who depend on those investments.
This is the reason why successful investors move away from traditional ownership structures and utilise strategic estate planning for children and the generations to come.
IGrow Trusts uses a legacy structure
IGrow Trusts helps investors set up a trust-and-company structure for long-term wealth creation.
This means purchasing investment properties through a company, while the shares in that company are held in a trust. Heirs can be appointed as trustees or beneficiaries of the trust. This ensures a smooth inheritance process for generations.
This family trust property structure has key advantages:
- Property assets aren’t part of the founder’s personal estate.
- No estate duty is owed on the underlying trust-owned property assets.
- The assets and income in the trust aren’t frozen when the founder passes away.
- Rental income and the running of the property continue without interruption.
- Beneficiaries continue getting their benefits according to the trust deed.
- Generations to come will inherit a structured portfolio instead of individual assets.
IGrow Trusts, as independent trustees, help ensure a smooth transition to your heirs as they take over handling matters.
Building intergenerational wealth
Creating sustainable intergenerational wealth involves more than the mere passing on of assets. It’s also about transferring financial education and the groundwork for success.
When the youth inherit a well-structured property portfolio, they are getting more than bricks and mortar. They receive an income-generating asset that will support things like their education, entrepreneurial pursuits, or further property investment.
“…Trusts can play a valuable role in protecting your wealth, supporting your loved ones, and transferring assets across generations as you intended.” (Source)
For IGrow investors, a well-structured family trust property portfolio is critical to the financial independence of loved ones left behind.
Preparing your loved ones for financial success
Through the trust structure mentioned above, trustees oversee the investments and ensure the trust’s objectives are met. This protects the property legacy over time.
With your property portfolio, the importance of passing wealth to the next generation of family members in a structured, smooth way becomes clear.
Key Takeaways
- Creating intergenerational wealth means property assets will benefit future generations.
- A trust-and-company structure can ensure estate continuity and safeguard family wealth.
- A family trust property structure means investment properties can be held outside a personal estate.
- Trust assets and income run smoothly after the founder’s death.
- IGrow’s independent trustees help ensure a smooth inheritance.
- Proper estate planning for children preserves wealth for future generations.
Conclusion
Youth Month reveals to us that the younger generations can shape the future. For property investors, a meaningful way of doing this is to leave a legacy that outlives them.
With our trust structure in place, passing wealth to the next generation is a meaningful act of love. In partnering with IGrow Trusts, investors can help preserve their assets, support their loved ones, and create generational wealth.
Contact an IGrow property investment strategist today and let’s ensure your estate planning is well set-up.
