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The Importance of creating a Trust

26 Mar

An Inter Vivos Trust is the most effective form of estate planning in the sense that on the one hand a separation of legal ownership and administrative control occurs and on the other hand a separation of beneficial ownership occurs.

Below are a few ABC’s pertaining to the establishment of a Trust:

How is a Trust created?

Step one is to consult a Legal Practitioner to ascertain whether the establishment of a Trust would be suitable for you.

Secondly if it is appropriate, a Trust Deed Agreement will be drawn up, as this is the foundation for the establishment of the Trust.

Once the requirements which are set by the Master of the High Court are met, the Deed is registered with the Master and the Master then issues the formal Letter of Appointment which enables the Trustees to act.
There are certain key features which are fundamental to the establishment of a Trust:

  • The Founder who is also known as the Donor is the person who forms the trust,
  • The Trust Deed is the instrument which gives legal recognition to the Trust,
  • The Trustees manage the Trust assets,
  • It is important to appoint an independent trustee to co-manage the trust
  • The Beneficiaries are the members who qualify to benefit from the Trust.

The advantages of creating an Inter Vivos Trust:

  • A Trust survives the life of an individual in the sense that it can provide continuity, which ensures that the affairs of the deceased continue after such death and without any interruption,
  • Trust Assets are generally protected from claims which may arise from matrimonial or relationship disputes,
  • A Trust can protect one’s assets from creditors,

A Trust can be employed for the benefit of someone who is either physically or mentally disabled or who is under the age of 18.

 

The administration of a Vivos Trust:

  • It is important  that the trust at all times be administered property to provide the maximum security and protection of trust assets.

Meyer de Waal & acknowledgement to Schoeman attorneys

 
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Posted by on 26/03/2014 in Content

 

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