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HOW DO I REGISTER A TRUST?

HOW DO I REGISTER A TRUST?

a3_aA trust is an agreement between the person who owns the assets and the appointed trustees. A trust can be a good way to preserve your wealth for your family and children. A well-managed trust will make sure that anyone who is a beneficiary of the trust benefits from it. The trustees have the important job to administer the trust and its assets objectively with the best interests of the beneficiaries in mind.

Trusts and their administration fall under the Trust Property Control Act no 57/1988.

What types of trusts are there?

It’s important to note that there are two types of trusts. An inter vivos trust and a testamentary trust. A testamentary trust is one that’s formed from the will of a deceased person. In the case of a testamentary trust the deceased's last will serves as the trust document. An inter vivos trust is created between living persons, and will form the basis of this article. Inter vivos trusts can limit estate duty and preserve your assets and wealth for your descendants. Certain financial institutions assist in setting up a trust and can act as trustees.

Registering an inter vivos trust

To register an inter vivos trust with the Master of the High Court, the following documents must be lodged.

  1. Original trust deed or notarial certified copy thereof.
  2. Proof of payment of R100 fee, for registration of a new Trust.
  3. Completed Acceptance of Trusteeship (J417) and Acceptance of Auditor Application (J405) forms.
  4. Bond of security by the trustees – form J344 (if required by the Master)

* There are no costs involved in amending an existing Trust.

These documents are also required for the Master to issue the trustees with letters of authority for administering the trust. A trustee may not proceed to administer the trust without the written authority of the Master.

If the trust’s assets or majority of its assets are located in a particular area, then the inter vivos trust has to be registered with the Master who has jurisdiction in that area.

De-registering of a trust

The Master can de-register the trust only once it has been terminated. The common law makes provision for the termination of a trust as the Trust Property Control Act makes no such provision. The following circumstances can be grounds for a trust to be terminated:

  1. by statute
  2. fulfilment of the object of the trust
  3. failure of the beneficiary
  4. renunciation or repudiation by the beneficiary
  5. destruction of the trust property
  6. the operation of a resolutive condition

You will still need the original letter of authority, bank statements reflecting a nil balance on the final statement and proof that the beneficiaries have received their benefits.

Administering the trust

Trustees are required to comply with the Trust Property Control Act, which determines how trusts should be administered and the role of the trustees. If trustees fail to comply with the Act they may face criminal prosecution. The trustees have to always act with the best interests of the beneficiaries in mind.

Some legal requirements of trustees include not being able to make secret profits, taking care and being objective when administering trust assets and always acting in good faith.

Reference:

Justice.gov.za. The Department of Justice and Constitutional Development, Administration of Trusts. [online] Available at: http://www.justice.gov.za/master/trust/ [Accessed 19/05/2016].

Sanlam.co.za. Sanlam Trusts. [online] Available at: https://www.sanlam.co.za/personal/financialplanning/willstrustsestates/Pages/trusts/
[Accessed 20/05/2016].

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 legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

HOW TO REGISTER AN INTER-VIVOS TRUST

HOW TO REGISTER AN INTER-VIVOS TRUST

A1_AIn South Africa there are mainly two types of trusts that are registered. An inter-vivos trust can be created between living persons, and a testamentary trust is created in the will of a deceased.

An inter-vivos trust is registered at the office of the Master of the High Court in whose area of jurisdiction the main assets of the trust are or will be held.

The first step is to draw up a valid trust deed. A trust deed is a contract between the founder of the trust and the trustees, for the benefit of a third party or parties, known as the beneficiaries. In terms of the trust deed, the founder agrees to transfer certain assets to the trustees of the trust for the benefit of the beneficiaries. The trust deed must stipulate who the first trustees of the trust are going to be. In many instances the Master will insist on at least one independent trustee to be appointed. This means that the independent trustee will receive no benefit from the trust assets apart from the specified and reasonable trustee remuneration. The beneficiaries must be specified in the trust deed, as well as their entitlement to either the capital of the trust, the income of the trust assets, or both.

A trust deed is a valid contract and therefore subject to all applicable laws. Furthermore, there are significant tax, financial and other consequences of being involved in a trust, whether as trustee, founder or beneficiaries. Therefore it is imperative to seek professional advice when drawing up this deed.

The duly signed and witnessed trust deed must be submitted to the Master of the High Court, together with the completed and signed Acceptance of Trusteeship for all trustees and certified copies of their identity documents. This Acceptance of Trusteeship states the basic information of the trustees that the Master requires, as well as certain declarations made by the trustee. If the Master requires the trustees to furnish security, proof of the bond of security by those trustees must be provided to the Master when the trust is registered. Form JM21 sets out certain requirements and information that must be supplied to the Master together with the other documents set out in this paragraph. This information include details on the professions or business occupation of the trustees to be registered, any previous experience that these trustees might have in the administration of trusts, the name and branch of the bank where a bank account will be opened for the trust, and so forth. An original undertaking by an auditor or accounting officer must accompany form JM21. Lastly, proof of the payment of the prescribed fee of R100 must be submitted.

On receipt of the above documents in accordance with all the requirements, the Master will issue a Letter of Authority to the trustees. The trustees may then act on behalf of the trust.

Any amendments to the original trust deed must be placed on record with the Master of the High Court where the original trust deed is on record.

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 legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

HOW TO REGISTER AN INTER-VIVOS TRUST

HOW TO REGISTER AN INTER-VIVOS TRUST

A2_MarIn South Africa there are mainly two types of trusts that are registered. An inter-vivos trust can be created between living persons, and a testamentary trust is created in the will of a deceased.An inter-vivos trust is registered at the office of the Master of the High Court in whose area of jurisdiction the main assets of the trust are or will be held.

The first step is to draw up a valid trust deed. A trust deed is a contract between the founder of the trust and the trustees, for the benefit of a third party or parties, known as the beneficiaries. In terms of the trust deed, the founder agrees to transfer certain assets to the trustees of the trust for the benefit of the beneficiaries. The trust deed must stipulate who the first trustees of the trust are going to be. In many instances the Master will insist on at least one independent trustee to be appointed. This means that the independent trustee will receive no benefit from the trust assets apart from the specified and reasonable trustee remuneration. The beneficiaries must be specified in the trust deed, as well as their entitlement to either the capital of the trust, the income of the trust assets, or both.

A trust deed is a valid contract and therefore subject to all applicable laws. Furthermore, there are significant tax, financial and other consequences of being involved in a trust, whether as trustee, founder or beneficiaries.  Therefore it is imperative to seek professional advice when drawing up this deed.

The duly signed and witnessed trust deed must be submitted to the Master of the High Court, together with the completed and signed Acceptance of Trusteeship for all trustees and certified copies of their identity documents. This Acceptance of Trusteeship states the basic information of the trustees that the Master requires, as well as certain declarations made by the trustee. If the Master requires the trustees to furnish security, proof of the bond of security by those trustees must be provided to the Master when the trust is registered. Form JM21 sets out certain requirements and information that must be supplied to the Master together with the other documents set out in this paragraph. This information include details on the professions or business occupation of the trustees to be registered, any previous experience that these trustees might have in the administration of trusts, the name and branch of the bank where a bank account will be opened for the trust, and so forth.  An original undertaking by an auditor or accounting officer must accompany form JM21. Lastly, proof of the payment of the prescribed fee of R100 must be submitted.

On receipt of the above documents in accordance with all the requirements, the Master will issue a Letter of Authority to the trustees. The trustees may then act on behalf of the trust.

Any amendments to the original trust deed must be placed on record with the Master of the High Court where the original trust deed is on record.

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 attorney for specific and detailed advice. Errors and omissions excepted (E&OE)

MAAK DIE OPSTEL VAN ‘N NALATENSKAP-LÊER DEEL VAN JOU OM-TE-DOEN LYSIE VIR 2016

MAAK DIE OPSTEL VAN ‘N NALATENSKAP-LÊER DEEL VAN JOU OM-TE-DOEN LYSIE VIR 2016

A3_BDie nuwe jaar is reeds in volle swang en dit is ‘n goeie idee om as deel van jou om-te-doen lysie, jou persoonlike sake in orde te kry.  Nie net vir gerieflikheidshalwe en gemoedsrus vir jouself nie, maar ook ter wille van jou familie.

Vra jouself die vraag af, “indien ek binne die volgende week sou sterf, sal my familie in staat wees, met die inligting tans tot hul beskikking, om verslag te lewer aan my boedel se eksekuteur ten opsigte van my bates en laste?”  Of sal hulle doelloos rondval om te probeer vasstel watter beleggings jy gehad het?  Het jy ‘n lewensversekeringspolis gehad?  By watter diensverskaffer was jou selfoonkontrak nou weer?

Met die bogemelde stelling stel ek nie voor dat jy jou finansiële posisie met almal in jou familie deel nie.  Die oplossing vir die penarie lê in die opstel van ‘n nalatenskap-lêer.  Hierdie lêer sal al jou belangrikste dokumente (of afskrifte daarvan) bevat, van jou testament tot by jou selfoonkontrak.

Dit klink natuurlik na ‘n reusagtige taak om mee te begin, maar wees verseker, indien die grondslag eers gelê is, sal jy dit maklik op datum kan hou.

Jy kan ‘n ringlêer met sakkies, of flipfile aanskaf vir die doel.  Die lêer moet op ‘n veilige plek bewaar word en onder andere die volgende inligting bevat:

ü
1. Inligtingsblad met die kontakbesonderhede van jou Prokureur, Makelaar, Bankier, Dokter ens.
2. ‘n Afskrif van jou Identiteitsdokument
3. ‘n Afskrif van jou nuutste Testament – Die oorspronklike testament sal in veilige bewaring in jou Prokureur se kantore gehou word
4. Jou oorspronklike Huweliksertifikaat, Huweliksvoorwaardekontrak, egskeidingsbevel en skikkingsakte (indien van toepassing)
5. Die nuutste weergawe van alle Langtermynversekeringspolisse – bv. Lewensversekering, ongeskiktheidsdekking en verbandbeskermingsdekking
6. Die nuutste weergawe van alle Korttermynversekeringspolisse – bv. Versekering op jou huis, huisinhoud en motorvoertuig
7. Besonderhede van jou begrafnispolis en byvoordele, asook ‘n lys van rekeninge waarop jy dekking het ingeval van sterfte
8. Bewys van jou Aandeleportefeulje
9. Besonderhede van jou bankrekeninge – bv. Jou tjekrekening, kredietkaartrekening en spaarrekening.
10. Besonderhede van jou beleggings – bv. Beleggingsrekening by ‘n bank en uitkeerpolis
11. Bewys van enige bates met waarde bv. ‘n muntversameling of juweliersware
12. Motorvoertuigregistrasie dokumente
13. Jou geldige Televisielisensie
14. Jou selfoonkontrak; landlynkontrak en internetdiensverskaffer kontrak
15. Besonderhede van alle winkelrekeninge bv Edgars of House and Home
16. Nuutste korrespondensie vanaf die Ontvanger van Inkomste
17. Besonderhede van jou Pensioenfonds en -voordele
18. Trustakte en Magtigingsbrief van enige Trust waarby jy ‘n belang het
19. Afskrif / Oorspronklike Titelakte van jou eiendom(me)
20. Besonderhede van jou Verbandrekening(e) oor jou eiendom(me)
21. Nuutste Huurkontrakte – waarby jy die huurder of verhuurder is
22. Rehabilitasiebevel
23. Enige skuldooreenkoms waar jy vir iemand anders geld skuld of hulle vir jou
24. Besonderhede van jou Mediesefonds en Mediese GAP Dekking

Die bostaande lys is ‘n riglyn en nie noodwendig volledig nie.  Dit moet aangepas word om by jou unieke omstandighede te pas.

Die lêer kan maklik op datum gehou word deur die veranderlike inligting op te dateer soos die relevante dokumente (bv. ‘n versekeringspolis) hernu word.

Nou is al jou belangrikste inligting bymekaar, nie net vir doeleindes van jou afsterwe nie, maar ook indien jy dit nodig kry vir ‘n transaksie waar jy bv. FICA dokumente benodig of indien jy vinnig wil vasstel of jou versekering ‘n gebarste warmwatersilinder dek.

Sommige van die bogemelde dokumente kan ook in elektroniese formaat gestoor word.  Jy kan dus jou lêer aanpas om uit beide harde kopieë (van die oorspronklike dokumente in jou besit bv. jou Huweliksertifikaat) en elektroniese kopieë (van die dokumente wat aan jou per e-pos gestuur word bv. versekeringspolisse en bankstate) te bestaan.  Onthou om gereeld rugsteun kopieë van die elektroniese lêer te maak en by die harde kopieë te stoor.

Terselfdertyd kan jy seker maak dat al jou dokumente op datum is en vroegtydig ‘n afspraak met jou prokureur maak vir die opstel of opdatering van jou testament.

Hierdie om-te-doen lysie item is beslis ‘n geskenk aan jouself wat sal aanhou gee deur die jare.

Opgestel deur Riëtte Smuts

Hierdie is ‘n algemene inligtingstuk en moet gevolglik nie as regs- of ander professionele advies benut word nie. Geen aanspreeklikheid kan aanvaar word vir enige foute of weglatings of enige skade of verlies wat volg uit die gebruik van enige inligting hierin vervat nie. Kontak altyd u regsadviseur vir spesifieke en toegepaste advies. (E&OE)

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MAKE THE PREPARATION OF A LEGACY FILE PART OF YOUR TO-DO LIST FOR 2016

The new year is already in full swing and it is a good idea to get your personal affairs in order as part of your to-do list.  Not only for convenience and peace of mind for yourself, but also for the sake of your family.

Ask yourself the question, “if I would die within the next week, will my family be able, with the information currently available to them, to report my assets and liabilities to my estate’s executor?”  Or would they rush around trying to determine what investments you had?  Did you have a life insurance policy?  Which service provider did you use for your cellular phone contract?

With the above statement I am not suggesting that you discuss your financial position with everyone in your family.  The solution to the dilemma lies in the drafting of a legacy file.  This file will contain all your important documents (or copies thereof), from your Will to your cellular phone contract.

It may sound like a daunting task to begin with, but rest assured, if the foundation has been laid, you can easily keep it up to date.

You can use a ring file with plastic sleeves or a flip file for this purpose.  The file must be kept in a safe place and amongst others, contain the following information:

ü
1. Information sheet with the contact details of your Attorney, Broker, Banker, Doctor etc.
2. A copy of your Identity Document
3. A copy of your latest Will – The original will be in safekeeping at your Attorney’s Offices
4. Your original Marriage Certificate, Antenuptual Contract, Divorce Order and Settlement Agreement (if applicable)
5. The latest version of all your Long-term insurance policies – eg. Life insurance, disability insurance and mortgage protection cover
6. The latest version of all your Short term insurance policies – eg. Insurance cover for your home, household and motor vehicle
7. Details of your funeral policy and benefits, as well as a list of accounts on which you have death cover
8. Proof of your Shareholding portfolio
9. Details of you bank accounts – eg. Your cheque account, credit card account and savings account
10. Details of your investments – eg. Investment Account at a Bank or annuity
11. Proof of any assets with value – eg. Coin collection or jewellery
12. Motor vehicle registration documents
13. Your valid Television License
14. Your cellular phone contract, land line contract and internet service provider contract
15. Detail of all retail accounts eg. Edgars or House and Home
16. Latest correspondence from the Receiver of Revenue
17. Details of your Pension Fund and -benefits
18. Trust Deed and Letters of Authority for any trust in which you have an interest
19. Copy / Original Deed of Transfer of your property(s)
20. Details of the Bond Account(s) over your property(s)
21. Latest Lease Agreements – where you are the Lessor or Lessee
22. Rehabilitation Order
23. Any acknowledgement of Debt where you owe money to someone or someone owes money to you
24. Details of your Medical Aid and Medical GAP Cover

The above list is a guideline and not necessarily complete.  Same should be customized to suit your unique circumstances.

The file can easily be kept up to date by replacing the variable information as the relevant documents (eg. An insurance policy) are renewed.

All your important information are now in one place, not only to assist your loved ones in the event of your death, but also to help you should you require for example your FICA documents for a transaction or if you quickly want to determine whether your insurance policy will cover a burst geyser.

Some of the above documents can also be stored in electronic format.  You can customize your file to contain both hard copies (of the original documents in your possession eg. Your Marriage Certificate) and electronic copies (of the documents that are sent to you via e-mail eg Insurance policies and bank statements).  Remember to make backup copies of the electronic file on a regular basis and to keep the electronic backup with the hard copies.

At the same time you can ensure that all your documents are up to date and make an appointment with your Attorney for the drafting or updating of your will.

This to-do list item is certainly a gift to yourself that will keep on giving over the years.

Compiled by Riëtte Smuts

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 legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

VOOR- EN NADELE VAN TRUSTS

VOOR- EN NADELE VAN TRUSTS

A2BTrusts hou verskeie voordele, maar ongelukkig ook nadele in.

Alhoewel hierdie waarskynlik nie ‘n samevatting van alle voordele en nadele is nie, deel ons graag ons ondervinding van die vernaamste voor- en nadele by die oorweging van ‘n Trust met u.

Voordele:

  • Groei wat in die trustbates plaasvind, vestig in die Trust en nie in u persoonlike boedel nie.
  • Deur die bates aan die Trust te verkoop, sal die bedrag wat deur die Trust aan u verskuldig is, uitstaande op die leningsrekening bly en sal dit as ‘n bate in u boedel beskou word. Hierdie bedrag kan egter vir boedelbelastingdoeleindes verminder word deur die jaarlikse skenkingsbelastingvrystelling van R100 000 te benut.
  • ‘n Trust bied beskerming teen probleme indien u verstandelik onbevoeg raak. Dit kan dit ook onnodig maak om ‘n kurator aan te stel om u finansiële sake te hanteer.
  • ‘n Trust bly vertroulik, anders as dokumente soos testamente en rekords van bestorwe boedels wat openbare dokumente is en oop is aan die publiek ter insae.
  • ‘n Trust kan finansiële beskerming aan gestremde afhanklikes, spandabelrige kinders of begunstigdes met spesiale behoeftes bied.
  • ‘n Trust kan die koste van die administrasie van opeenvolgende boedels omseil deur voorsiening vir opeenvolgende begunstigdes te maak.
  • ‘n Trust kan die emosionele stres op u gesin verminder wanneer u sterf, aangesien die Trust sal voortgaan sonder enige van die formaliteite wat by ‘n bestorwe boedel vereis word.
  • Deur u Trustees verstandig te kies, kan u professionele bate- en beleggingsbestuur verseker.
  • Die Trust sal u in staat stel om, via die Trustees, na u dood ‘n mate van beheer oor die bates in die Trust te behou.
  • Na u dood en voordat u boedel afgehandel is, kan die Trust ‘n bron van inkomste aan u afhanklike(s) voorsien.
  • U sal verhoed dat u minderjarige kind se erfenis in die Voogdyfonds geplaas word.
  • U sal die probleme vermy om bates te moet verdeel ten einde ‘n gelyke uitkering aan die erfgename te doen.
  • Trustinkomste kan na die stigter se dood onder die begunstigdes met laer belastingkategorieë verdeel word wanneer individuele vrystellings aangewend kan word, maar alle belasbare inkomste wat in die Trust behou word, sal sonder enige vrystellingsvoordele teen 40% belas word.
  • Inkomstevlakke kan na goeddunke van die Trustees saam met die veranderende behoeftes van die begunstigdes gevarieer word.
  • Omdat die bates die eiendom van die Trust bly, en nie van die begunstigdes nie, hoef hulle ook nie die bates as deel van hulle boedels in te reken wanneer hulle sterf nie, wat ‘n besparing in boedelbelasting tot gevolg het.
  • Die trustbates sal om dieselfde rede teen krediteure beskerm wees.

Nadele:

  • U het nie meer algehele beheer oor u bates nie, aangesien die ander Trustees ook ‘n sê sal hê.
  • ‘n Trust word geregistreer en die owerhede kan toegang daartoe verkry.
  • U kan moontlik die verkeerde Trustees kies. Daar kan probleme ontstaan indien hulle wedywerende erfgename is. Dit is hoekom dit so belangrik is dat u minstens een onafhanklike Trustee moet hê.

Hierdie is ‘n algemene inligtingstuk en moet gevolglik nie as regs- of ander professionele advies benut word nie. Geen aanspreeklikheid kan aanvaar word vir enige foute of weglatings of enige skade of verlies wat volg uit die gebruik van enige inligting hierin vervat nie. Kontak altyd u regsadviseur vir spesifieke en toegepaste advies.

ADVANTAGES AND DISADVANTAGES OF TRUSTS

ADVANTAGES AND DISADVANTAGES OF TRUSTS

A2BTrusts have various advantages, but unfortunately there are also disadvantages.

Although this is not a complete synopsis of all the pros and cons, our experience may assist you in making decisions about Trusts.

Advantages:

  • Growth taking place in the Trust assets settles in the Trust and not in your personal estate.
  • By selling the assets to the Trust, the amount owed to you by the Trust will remain outstanding on the loan account and shall be regarded as an asset to your estate. This amount may be decreased for Estate duty purposes by utilising the annual Donations Tax exemption of R100 000.
  • A Trust offers protection against problems should you become mentally incompetent. This may also make the appointment of a curator to handle your financial affairs unnecessary.
  • A Trust remains confidential as opposed to documents like wills and records of deceased estates which are public documents and therefore open for inspection.
  • A Trust can offer financial protection to disabled dependents, extravagant children or beneficiaries with special needs.
  • A Trust can evade the administrative costs of consecutive estates by making provision for consecutive beneficiaries.
  • A Trust can lighten the emotional stress on your family when you die because the Trust will continue without any of the formalities that are required from a deceased estate.
  • By choosing your Trustees well you can ensure professional asset and investment management.
  • The Trust will enable you to have a degree of control over the assets in the Trust after your death, via the Trustees.
  • After your death and before the estate has been settled the Trust can provide a source of income for your dependent(s).
  • You will prevent your minor child’s inheritance from being transferred to the Guardian’s Fund.
  • You will avoid the problem of trying to distribute assets equally among the heirs.
  • Trust income can be divided among the beneficiaries with lower tax categories after the death of the initiator when individual exemptions may be utilised, but all taxable income kept in the Trust will be taxed at 40% without exemption benefits.
  • Levels of income may be varied according to the changing needs of the beneficiaries at the discretion of the Trustees.
  • Due to the assets remaining the property of the Trust and not the beneficiaries it need not be included in people’s estates as part of their assets when they die, which effects a saving in Estate duty.
  • The Trust assets will be protected from creditors for the same reason.

Disadvantages:

  • You don’t have full control of your assets, as the other Trustees also have a say in the matter.
  • A Trust is registered and the authorities can gain access to it.
  • You could possible choose the wrong Trustees. You could expect problems if the Trustees are vying heirs. This shows how important it is to have at least one independent Trustee.

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 legal adviser for specific and detailed advice.