Can anyone register a trust?
Yes, but it is a costly and administratively complicated process and it is therefore not suited for every individual. In the event that your assets (including life policies) exceed R3.5 million and if the assets consist of capital appreciating items it would be advisable to consider a trust.
Is it expensive to register a trust?
The initial capital investment might be costly depending on how complicated your trust is. However, most people considering a trust would rather pay the premium in order to safeguard their financial legacy. A person considering a trust must also take into account the financial burden of the annual compulsory costs i.e. financial records, taxation of the trust, recordkeeping etc.
How long does it take to register a trust?
As with everything, it depends. It normally takes up to 6 weeks for registration to take place, however, recently with the delays currently experienced in the master’s office the registration process has been extended considerably and it is advisable that if you consider registering a trust, you should proceed rather earlier than later.
Who are the parties to a trust?
How does a trust acquire assets?
Assets can be transferred into the living trust by either selling it to the trust (through a loan granted to the trust) or by donating cash or other assets to it (any person can donate R100 000 per year tax free; 20% donations tax applies to further donations within the year). Once the trust has capital available it can acquire assets if allowed to do so in terms of the trust deed.
What are the benefits of a trust?
The two main advantages of having assets in a trust are:
What are the disadvantages of a trust?
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your adviser for specific and detailed advice. Errors and omissions excepted (E&OE)