Important aspects to remember should a trust acquire properties

~ Written by ~

In view of the fact that trustees cannot enter into agreements until they have been issued with Letters of Authority by the Master of the High Court, it should be noted that no person may enter into an agreement "on behalf of a trust to be formed". This is only possible in the case of companies and close corporations. With regards to a trust, the trust must already be in existence at the time the agreement is entered into.

Be careful when you define beneficiaries in the trust deed

~ Written by ~

The Trust Property Control Act does not specify the requirements or procedures required for the formation of a valid trust. The Master of the High Court may have issued Letters of Authority, and may have assigned a registration number to the trust, but this does not make the trust valid. It is not the Master of the High Court’s duty to test and investigate the validity of a trust. The validity of a trust is usually only challenged by creditors, SARS, a soon-to-be-ex-spouse, and so forth, at a time when it may seem beneficial to such persons or creditors to disregard the trust.

Time to revisit a trust as part of your estate plan?

~ Written by ~

Proper estate planning is widely defined as the arrangement, securement, management and disposition of your estate so that you, your family and other beneficiaries may enjoy, and continue to enjoy, the maximum benefits from your estate and your assets during your lifetime and after your death, no matter when death may occur. This is therefore a great deal more than just the retirement planning performed by most financial advisors.

Can you use a trust to protect your assets while you are alive?

~ Written by ~

Trusts are relevant today if they are used correctly. A very important consideration is the stage in your life that you create a trust. If you form a trust as part of your estate plan and create wealth in a trust, in stead of in your personal name, you can benefit from the trust during your lifetime, not only after your death.

Can you dictate to trustees in your letter of wishes?

~ Written by ~

A letter of wishes is a way for you to inform others of matters to be taken into account after your death. It may, for example, contain guidance to the guardians of minor children detailing how you might want your children brought up in terms of education, religion or residence. A letter of wishes is a separate document to your will, but it accompanies your will. It is not legally binding but can guide your executors and trustees to ensure that your personal wishes are carried out.

Which laws impact trusts in South Africa?

~ Written by ~

Trusts became part of South African law after the British occupied the Cape in 1806. South African trust law as we know it today was developed incrementally as a combination of English law, Roman-Dutch law and South African rules. The South African government is working on improving the regulation of trusts. Currently, the law of trusts in South Africa is not contained in any single set of legislation. Trusts in South Africa are, in fact, largely unregulated, which frequently leads to their abuse.

What to watch out for before you contract with a trust

~ Written by ~

People are often nervous about entering into contracts with a trust due to the unique nature of trusts. Often a contracting party requests a resolution whereby the trustees authorise the trust to enter into a particular transaction. This is particularly true in the case of the purchase or sale of immovable property. In terms of the Land Alienation Act, any deed of sale of immovable property has to be in writing and the parties thereto or their agents have to be legally authorised to act at the time of signing of the contract.

Fair remuneration as trustee?

~ Written by ~

A trustee must act in good faith, and at all times avoid conflict of interest between personal interests and official and fiduciary duties to the trust and to the beneficiaries. A trustee may not gain personally from the trust fund (other than reasonable remuneration), in his/her capacity as trustee. However, trustees may be rewarded for the execution of their official duties.