Description of a trust
A trust is an independent legal entity where assets will be under the control of trustees as done by the founder.
This will happen during the founder’s lifetime or at the death of the founder.
It may acquire property, shares & other assets for its beneficiaries A trust can save you taxes and expenses as it is not part of your estate. The value of your assets will increase in the trust and not your personal estate which can help you with regard to taxes
The types of trusts:
• Trust between living persons (inter vivos trusts) – created by during lifetimes of the persons through an agreement. The assets are transferred into the trust, which is managed by the trustees on behalf of the beneficiaries.
• Testamentary trusts – created in terms of a will.
• Special trust: qualifies for a lower rate of taxation. There are two types:
Type A: A living trust that is set up to benefit of an incapacitated or disabled person that cannot look after their financial matters .
Type B: A testamentary trust that will benefit relatives of the deceased who are minors.
Both types of special trusts will have tax rates of between 18 and 40% instead of the usual 40% rate applicable to trusts.
Inter vivos trust can reduce estate duty. No estate duty will be paid on the trust’s assets. This can save a huge amount of money.
Advantages of a trust
Reduces estate duty: Growth taking place in the Trust assets settles in the Trust and not in your personal estate. Estate duty rates are 20%.
Protection against creditors: Creditors will not have a claim on the assets as the trust’s assets will not be owned by the beneficiaries.
Reduce administrative costs: A trust can evade administrative expense by making provision for consecutive beneficiaries
Assurance: After your death the trust can provide income for those dependent on you.
Trust Registration – Required documentations:
| Name of the Trust: | |
| 1 x Donor / founder: | Copy of ID document |
| Occupation | |
| Physical Address | |
| Postal Address | |
| Telephone and Fax Number | |
| Cell Number | |
| Email Address | |
| Trustees: | Minimum (2 Trustees) |
| Copy of ID document | |
| Occupation | |
| Physical Address | |
| Postal Address | |
| Telephone and Fax Number | |
| Cell Number | |
| e-mail address | |
| Beneficiaries: | Copy of ID Document |
| Copy of Birth Cert. (if minor) |
There are many more advantages of a trust. Make sure to contact us to find out more.
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