Are there alternatives to physical trustee meetings?

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It is not always possible for all trustees to meet. Certain trustees may even use this as an excuse to make decisions behind other trustees’ backs. As long as the trust instrument does not allow for methods which have the effect of contravening the common law, such as the abdication of powers and duties to anyone else, the trust instrument can determine which methods of participation is allowed, or specifically disallowed, such as the use of proxies, electronic or telephonic meetings.

Minor trust beneficiaries

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Under South African law, a minor (a person under the age of eighteen) on his/her own, in general, cannot inherit because they do not have contractual capacity. Therefore, upon the death of a parent, assets bequeathed to a minor in terms of a will, or assets the minor inherits due to the parent dying intestate (without a will), are liquidated and the proceeds invested in the Guardian’s Fund (this fund forms part of and is being regulated by the Master of the High Court) at low interest, with limited access thereto, until the minor turns eighteen.

Trust taxes 101

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The South African Revenue Service (Sars) will not tax amounts in excess of the total income or capital gains received by the trustees, nor will Sars tax more than one person on the same amount. Where income or capital gains is taxed in the hands of the trust, any subsequent distribution thereof will not attract tax in the hands of the beneficiary.

Considerations when you sell your assets to a trust

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Many people attempt to move their assets into a trust after they have created wealth in their personal names. Moving your paid-up assets into a trust may be problematic, as it may cause various tax consequences.

Can your will compromise your wish to create a testamentary trust?

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Most people delay addressing their wills because it is an emotional document to prepare. However, proper estate planning includes the drafting of a will, which complements your estate plan. It is critical to comply with all the requirements to draft a valid will, otherwise it may be open to attack.

A closer look at business trusts

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People are still advised to utilise trust structures when they structure their business affairs to avoid paying taxes. Although historically people often got away with paying minimal taxes, if that is your primary reason for establishing a trust nowadays, you are on the wrong path.

Can you bequeath your assets to an existing inter vivos trust?

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It may make sense in many instances to utilise your existing trust/s as part of your legacy plan. Your assets can be bequeathed to an existing trust, if that trust instrument allows for that. The trustees of that trust have to be specifically empowered in terms of the trust instrument to accept such a bequest. Review the trustee power clause to ensure that the trustees can accept further donations/bequests.

Be careful what beneficiaries can do with their rights

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A trust is either set up during the live of a person (inter vivos trust) or upon the death of such person in terms of his/her will (testamentary trust). Beneficiaries are those persons who are initially named by the founder in the trust instrument and are subsequently selected by the trustees from time to time in terms of the trust instrument stipulations, set by the founder.