Trusts In South Africa Explained

Trusts are a type of legal entity that can be used to manage assets. If you have more than one beneficiary, it is usually advisable to use a trust to hold property and/or money for them. A trust can protect your assets from being accessed by third parties who may attempt to benefit from the death of an elderly or deceased person. Trusts also offer privacy for beneficiaries, because the terms of the trust will only be disclosed if there is a court order requiring such information to be made public.

What Is A Trust?

A trust is a legal arrangement in which title to property is held by one person (the trustee) for the benefit of another person (the beneficiary). Trusts can be created by a will, or by other legal documents, such as a deed or contract. Trusts are commonly used to manage assets for the benefit of others. For example, you might set up a trust so that your children’s inheritance would be managed until they reach adulthood and then distributed among them equally.

There are two types of living trusts in South Africa namely,

1) Inter-Vivos Trust (Living Trust), and

2) Testamentary Trust (Created in terms of a valid will).

Why Do You Need A Trust?

• A trust can be a great way to protect and grow assets, including the property you own.
• The right types of trusts can help you manage your wealth, protect it, and pass it on to loved ones after you’re gone.

Who Controls The Trust?

There are two different types of people involved in trusts: trustees and beneficiaries. The trustee(s) are the people who control the trust, while beneficiaries receive its benefits.

Trustees must manage the assets of the trust responsibly and act in accordance with its terms, which can be written or unwritten. Trustees have a fiduciary duty – meaning they are responsible for managing assets according to what is best for those who benefit from them. Trustees may be individuals or companies (in South Africa), but it’s common practice to appoint a trustee as an individual so that they can retain more control over their own affairs as well as any assets held under a separate legal entity such as an offshore company or trust structure abroad.

What Are The Benefits Of Trusts In South Africa?

There are many different ways in which a trust can benefit you and your family. The main beneficiaries of a trust are the persons who would otherwise inherit the property if it was left to them directly by you, without being placed into the trust.

You may also appoint additional persons (non-beneficiaries) to act as trustees or trustees on death. These people have no right to any income from the property, but instead have duties imposed upon them by you (the settlor).

• Trusts are a good way to protect your personal and business assets. If you have children, for example, and want to leave a certain amount of money or property to them upon your death, a trust can help make sure that it happens in the way you intend.
• Trusts can be used for a variety of reasons. You might use one as part of an estate plan, or as part of a tax strategy.
• Creditors are not able to get to your assets. You can freely conduct business without risking your family’s future or wealth.
• Creditors cannot get to your assets on your death to settle an unpaid debt.
• With a trust, you are also saving on estate duty.
• There are various tax benefits.

Book A Consult With Specialist Trust Lawyers In South Africa Today.

This article has hopefully helped you understand the basic terms, benefits and uses of trusts in South Africa. Trusts are an important part of your estate planning and can be used to protect your assets or those of loved ones. PM Attorneys’ specialist trust lawyers in South Africa employ a formidable litigation team with extensive experience in resolving trust-related matters that specialises in the registration and administration of trusts across South Africa. If you’re looking for more information about trusts or to book a consult to discuss your trust needs, contact us today.