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Business Trusts

Trusts and financial planning

The trust in financial planning and the advantages of a trust

  • Custodianship of the assets
    Custodianship of the assets of the trust prevent assets from being squandered or wastefully dissipated, for example, in those instances where the beneficiary is a minor or is insolvent or is incapacitated or is too irresponsible or inexperienced in money matters.
  • Governance (management and control of trust assets) is facilitated:
    where may owners with divergent expectations and requirements own the same asset the management of the assets becomes complicated if not impossible.

Protection of assets against creditors

A discretionary trust enjoys creditor protection in the event of the trust beneficiary's insolvency. The assets of the trust are held by the trustees and the creditors who are the beneficiaries cannot attack the assets if the beneficiaries have no vested rights to the assets.

Estate duty and related savings

Estate duty and related savings are achieved by divesting oneself of ownership of growth assets in favour of a trust. In so doing for as long as the trustees keep the trust going and retain the assets for the unvested and unspecified benefit of the planners descendants no estate duty need be paid on the death of the descendant.

Further advice regarding trusts may be obtained by contacting us

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Northcliff, Johannesburg
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