A trust is an entity used to hold assets. It is recognised as a separate legal entity for tax purposes and is often used to structure the ownership of a person’s assets in the most tax-efficient manner.
A trust is established by signing a written Trust Deed, which is then registered with the Master of the High Court. Amongst other things, the Trust Deed appoints trustees to manage the assets that will be held in the trust; nominates the beneficiaries who will eventually receive the income and/or assets of the trust and regulates the powers and responsibilities of the trustees.
This Trust Deed deals comprehensively with all of the issues relevant to the establishment and management of a trust and its assets. The Trust Deed also includes carefully constructed clauses that ensure that the tax-structuring potential of the trust is maximised. You will also be give the opportunity to customise the terms of the Trust Deed to suite your specific circumstances and requirements.
Once you have purchased and signed the Trust Deed, it is simple to complete the process of registering the trust with the Master of the High Court. We provide you with the means to do this yourself so that you can save thousands of Rands.
Full details of the trust deed:
The drafting process utilized for the trust deed includes the following capabilities:
- Up to eight trustees may specified and full biographical details of each of them will be included.
- Up top ten beneficiaries may be named and described in the trust deed and (if requested) provision can be made for the receipt of benefits by any of the beneficiaries’ children and/or spouses.
- The provision of security by the trustees can be either included or excluded.
- The trust deed includes detailed provisions dealing with vesting dates, maintenance, the trust’s name, the trust income and its investment, retention and distribution of trust funds, trust deed amendments, renunciation of benefits and the accounting records to be kept in respect of the trust.
- The donor’s contribution to the trust is described and provision is made for subsequent capital additions to trust fund.
- Comprehensive terms are included in relation to the trustees, including the minimum number of trustees, the filling of any vacancies in the board of trustees, the appointment of new or additional trustees, the manner in which trustees’ meetings are to be held and trustees’ decisions taken, deadlock breaking mechanisms in respect of trustees’ decisions, the nomination of alternate trustees, trustee indemnities, the circumstances in which a trustee’s office will be automatically terminated and the remuneration of trustees for any professional services rendered.
- In order to ensure maximum flexibility, the trustees are afforded the widest possible range of powers in relation to the trusts affairs, including amongst other things the investment of trusts funds, the liquidation of trust assets, the pursuit of claims, the distribution of trust income or capital, the conclusion of contracts, and a range of further powers necessary to conduct the trust’s affairs with maximum efficiency.
- The provisions pertaining to the distribution of trust capital include the potential for the separation of capital and its payment to other trusts.
- The vesting of benefits in beneficiaries is meticulously dealt with and special provision is made for the retention in trust of benefits distributed to beneficiaries under the age of 25 years.
- Vested rights to benefits are also protected to the maximum degree possible against insolvency, debt executions, cession and any community of property between spouses.
The contents and terms of each trust deed are dependent on the responses given during the online interview process. As a result, the above list constitutes a broad overview of the issues typically addressed in the document and is not intended to be comprehensive.