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Ok. Got itIt is critical to get expert advice so that you can choose the right trust for your needs.
By the Fiduciary team at Nedbank Private Wealth
Trusts are tools to protect and grow wealth for your beneficiaries during and after your lifetime
A trust is an important financial and estate-planning tool that, together with your will and other structures, can help protect your personal and business assets during and after your lifetime for your beneficiaries. It is critical to get expert advice so that you can choose the right trust for your needs, as different trusts have different purposes, benefits and limitations.
What are the main benefits of a trust as a wealth-structuring tool?
Generally, trusts provide flexibility and continuity, facilitate effective distribution of your assets when you pass away, enable the protection of dependants and vulnerable beneficiaries, and can protect assets from being seized.
What is a trust?
A trust is an arrangement by which ownership of the assets of a person is transferred to another to be administered for the benefit of others. There are three key parties to a trust:
Founder/Donor/Settlor | Trustees | Beneficiaries |
They create the trust and transfer all (outright and unconditional) ownership and control of identified assets to the trust. | They administer and control the assets on behalf of the beneficiaries. | They may benefit from the trust. |
Generally, there are two types of trusts:
You can set up trusts for different purposes such as asset protection or for charitable purposes.
Do you need a trust? Here are some situations where trusts may or may not be the answer.
What we suggest are mere illustrations. It is important to get proper advice that considers your circumstances and needs and that unpacks the costs of transferring assets to a trust, such as capital gains tax, transfer duty, and securities transfer tax.
Example 1: |
Circumstances and needs:
What are the benefits of a discretionary inter vivos trust for them? If they transfer the share portfolios into a trust, they will achieve the following:
|
Example 2: |
Circumstances and needs:
Does Alfonso need a trust? No, Alfonso would not benefit from the primary-residence exclusion if the trust disposed of the property. The costs of establishing and funding a trust, together with the ongoing costs, do not warrant the establishment of a trust at this stage. |
Example 3: |
Circumstances and needs:
Should Emily consider establishing a trust? Yes, Emily can either leave the assets to a testamentary trust in terms of her will or create an inter vivos trust during her lifetime. Victor would be a discretionary beneficiary of the trust. The assets would be protected in the trust, and Emily will be protecting Victor from himself and anyone that may influence him. |
If you would like to set up a trust (South African or international), consider one with Nedgroup Trust for these reasons:
Why Nedgroup Trust? We provide peace of mind to trust founders, trustees and beneficiaries. We have offered great service since 1834. Over the years we have continued to invest in expertise, processes and systems to ensure we provide reliable trust administration and corporate trustee services for a range of clients. |
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