WHAT ARE SOME OF THE BENEFITS OF AN INTER-VIVOS TRUST?
Shielding Assets from Creditors: One of the primary benefits of an inter-vivos trust in South Africa is the ability to shield assets from creditors. When assets are transferred into a trust, they no longer belong to the individual who created the trust (the settlor) but are owned by the trust itself. As a separate legal entity, the trust becomes the custodian of these assets, making them less vulnerable to potential creditors seeking to seize them.
Minimizing Risk in Business Ventures: For business owners, an inter-vivos trust can provide a layer of protection for assets held within the trust. By transferring business assets, such as property, investments, or intellectual property, into the trust, the settlor can separate personal assets from business assets. This separation helps mitigate the risks associated with business ventures, such as lawsuits, debt obligations, or insolvency. In the event of business failure, personal assets held in the trust may remain protected.
Preserving Family Wealth: Inter-vivos trusts are particularly useful for preserving family wealth across generations. By transferring assets into a trust, individuals can ensure that their wealth is managed and protected for the benefit of their family members. The trust can hold various assets, including property, investments, or businesses, and provide a framework for their distribution among beneficiaries according to the settlor’s wishes.
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