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DEFINITION OF A TRUST
A Trust is a separate legal entity.
A trust is created by a donor.
Trustees are appointed to administer the trust property for the benefit of
beneficiaries.
The donor can be the beneficiary or a trustee but cannot be
the sole beneficiary or the sole trustee or there is no valid trust
WHAT IS A TRUST DEED
A Trust Deed is a legal document in which all the terms of the trust such as
the powers of trustees, payment of income and capital etc. are
encapsulated.
PARTIES TO A TRUST
Donor - the person who donates the initial trust funds to form the
trust. Funds can be as little as R 100. Examples of donors are a parent,
friend or family members.
Trustees - They administer the trust
funds and assets for the benefit of the beneficiaries. They make the decisions
on behalf of the trust. A trustee can be you, your spouse, an attorney,
accountant or close family or friends or a group of
these.
Beneficiaries - they are the ones who benefit from the
trust.For example, your children, a spouse, a disabled family member or a family
member who lacks the legal capacity to make decisions on their
own.
*DID YOU KNOW that you can own property in a trust. As at
2011 the transfer duty rate is the same for individuals, CC’s , Companies and
Trusts. Previously the payment of transfer duty was a disadvantage to
registering property in the name of a trust as a trust had to pay a higher
amount of transfer duty. Purchasing your home or investment properties in a
trust has now become easier and has its advantages:
- A trust is a
separate legal entity
- It is not affected by a change in membership
.
- No transfer to your beneficiaries has to occur on death.
- Your
estate will save estate duty and transfer costs for the assets the trust owns.
- Your minor children or grandchildren can ‘own’ the property through the
trust .
- All income or capital derived from the trust can be used to
provide for the needs of a spouse or child
- The trust funds are
administered in accordance with the trust document which would be drafted to
your requirements.
*DID YOU KNOW that if you or your spouse dies
without creating a trust in your will for your minor (below 18) children or
without creating a trust while you are alive then your minor child’s share in
your estate is paid into the Guardians fund.
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