Personal liability is limited to the assets in an individual’s name. Creditors cannot access the assets in a trust, unless it was set up with the intention to defraud creditors. Each risk poses a potential threat that could result in dire consequences. Through using our services you are able to minimise or do away with such risks right from the start.

Let’s look at some vital structuring fundamentals and benefits:

The Family Trust structure is the recommended vehicle in which to accumulate cash, have ownership of long-term assets and structure your life and disability cover. Any person, even a salaried employee or a business owner, is at risk in their personal capacity, and therefore it is imperative to implement the best legal and tax efficient structure to optimise asset protection, to create wealth and to ensure that dependants and future generations are catered for.

A Trust creates a separate legal persona that is allowed to own assets and, through the trustees, to transact in its own name. An individual is therefore protected in their own name, as well as in their capacity as trustee.

A Trust is an entity that has the capacity to outlive the founder. In the event of an individual passing away, the trust will continue to operate as normal and will not incur any unnecessary taxes or forced sales of assets.

More than 95% of people have their Life Cover in their own names. They, therefore, do not enjoy any tax benefits and have very little protection, in many cases none whatsoever. Spouses are usually nominated as the beneficiary, which results in tax implications that are delayed and have an impact when least expected.

A 'short and sweet' list of the benefits of a trust-owned life policy:

The Family Trust structure is the recommended vehicle in which to accumulate cash, have ownership of long-term assets and structure your life and disability cover. Everyone is at risk in their personal capacity, and therefore it is imperative to implement the best legal and tax efficient 'structure' to optimise asset protection, to create wealth and to ensure that dependants and future generations are catered for.

A Trust creates a separate legal persona that is allowed to own assets and, through the trustees, transact in its own name. An individual is therefore protected in their own name, as well as protected in their capacity as trustee.

A Trust is an entity that has the capacity to outlive the founder. In the event of an individual passing away, the trust will continue to operate as normal and will not incur any unnecessary taxes or forced sales of assets.

An Inter Vivos Trust is established during the lifetime of the founder. The process of registering a trust is fairly easy, but it is of utmost importance to consult an experienced trust attorney to draft the Trust Deed. The Trust Deed is the contract that dictates the relationship between the founder and the trustees.

One of the primary advantages of a living trust is that it offers tax-efficient management and control of assets after death. The growth in the estate is 'pegged' and the value will increase in the trust. A trust creates a separate legal entity that owns the assets outside of the founder’s personal estate, and therefore the trust assets do not form part of a personal estate for the calculation of Estate Duty.

Taxes and costs of up to 35% at death can be saved, including:

• Estate Duty (20% of estate) as the Trust will continue to persist after death.
• Executor Fees (at 3.99% of the gross estate). This is a particularly unnecessary and avoidable tax. Executor fees are calculated on the gross value of an estate and deducted before any other expenses, therefore the executor can receive up to 15% of a net estate. (16.4% CGT) on growth assets.
• Transfer costs on immovable property (as property ownership does not transfer to anyone after death).

Bank accounts and cash reserves will not be frozen during the winding up of the estate, which can take up to 2 (two) years. A trust will ensure rapid access to capital and income after death.

In South African Law, a minor cannot be the registered owner of property, therefore the asset is liquidated and the proceeds invested in the Guardian Fund at 3% interest rate. Assets are also protected against spendthrift children, who will not be able to reduce the assets to zero.

Some assets cannot be divided (e.g. businesses, farms or other property). By placing these types of assets in trust, the heirs can be the beneficiaries of the income generated by the assets.

A Will becomes a public document at the time of death. A Trust does not form part of an estate, and therefore the list of assets held in a trust remains confidential.

Property carries a certain amount of risk (through bond finance) and should be in a Trust, which is an asset holding entity. The costs and taxes (transfer duty) can be efficiently structured if a unit is purchased directly from a development company.

In circumstances where the primary residence is bonded, it is best not to transfer that particular property into a Family Trust, as it introduces a 'secured risk' which could affect the other assets in the Trust should the mortgage bond be executed and the home loan recalled.

A preferred strategy is to ring-fence the risk and place the primary residence (bonded) into a separate Residential Property Trust.