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
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
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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