Assistance with will - Trust Fund still the best?





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  1. #1
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    Default Assistance with will - Trust Fund still the best?

    Swambo and myself have decided to make certain changes to our will. We would like to bequeath (bemaak) a certain cash value to each of our grand children. This can be used for tertiary training but any remaining value must be paid out to them. In the old days this would have been held in Trust until needed or paid out when they reach a certain age.

    Now my question for the legal gurus, is a Trust fund still the best way of doing it? How expensive is the administration of the Trust fund? Most economical way of doing it?

    Thanks for help.
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    Default Re: Assistance with will - Trust Fund still the best?

    I think trust funds is out of fashion.

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    Default Re: Assistance with will - Trust Fund still the best?

    Quote Originally Posted by Chris Stoffel View Post
    I think trust funds is out of fashion.
    What is the alternative?
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    Default Re: Assistance with will - Trust Fund still the best?

    Pm sent.
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    Default Re: Assistance with will - Trust Fund still the best?

    I've had conflicting advice on the issue - from attornies and accountants.

    the best thing to do is to get advice and do some research yourself on the pros and cons.


    I have recently opened a trust for some assets - my accountant says I'm nuts, my lawyer says great stuff.

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    Default Re: Assistance with will - Trust Fund still the best?

    Quote Originally Posted by bos_otter View Post
    Pm sent.
    Thanks, replied
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    Default Re: Assistance with will - Trust Fund still the best?

    With the last of our direct beneficiaries (kids) almost finished with their tertiary education, and secondary beneficiaries not getting that much if our kids survive us, not that much of an issue, they'll share the whole R97.30 in cash.

    But, the clause in our will had the money going into a trust held by our executors - a large Durban accounting company where a good friend is the managing partner. There are some restrictions but the cash would get paid out at age 23. 5 years to go in the case of the youngest nephew.

    To be honest, once I've popped my clogs I'm not too fussed how the beneficiaries use the money. My kids have their heads screwed on and won't waste it. If the others get anything they can do what they like.
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    Default Re: Assistance with will - Trust Fund still the best?

    It is still a good idea for minor beneficiaries as the trust then pays income tax at the rate of a normal taxpayer and not the punitive trust tax rates.

    With the new legislation regarding interest free loans to trust / higher taxation of trust in general it is bound to become less attractive, but still very useful in certain circumstances as it still holds a lot of other benefits. These days it would be recommended to consult with a professional, but to qualify this, not a professional that sets up trust as you are likely to end up with more than 1 trusts that you will not use / need.

    You can still make use of a trust for risk protection, or if you want to transfer assets, but if the value of assets exceed R2,4 million (assuming this is split between 2 spouses) then the new loan account legislation will kick and annual donations tax will become payable when this amount is exceeded. Stil helps to prevent the painful process of winding up an estate, which in itself is a major benefit, especially the way our Master's Office functions these days.

    Sounds like you already received advice on the matter, so hopefully your questions have been answered.

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    Default Re: Assistance with will - Trust Fund still the best?

    Quote Originally Posted by Anton Meyer View Post
    It is still a good idea for minor beneficiaries as the trust then pays income tax at the rate of a normal taxpayer and not the punitive trust tax rates.

    With the new legislation regarding interest free loans to trust / higher taxation of trust in general it is bound to become less attractive, but still very useful in certain circumstances as it still holds a lot of other benefits. These days it would be recommended to consult with a professional, but to qualify this, not a professional that sets up trust as you are likely to end up with more than 1 trusts that you will not use / need.

    You can still make use of a trust for risk protection, or if you want to transfer assets, but if the value of assets exceed R2,4 million (assuming this is split between 2 spouses) then the new loan account legislation will kick and annual donations tax will become payable when this amount is exceeded. Stil helps to prevent the painful process of winding up an estate, which in itself is a major benefit, especially the way our Master's Office functions these days.

    Sounds like you already received advice on the matter, so hopefully your questions have been answered.
    Dankie Anton
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    Default Re: Assistance with will - Trust Fund still the best?

    There is a HUGE difference between a 'Testamentary Trust' and an 'Inter-Vivos Trust'

    'Inter Vivos Trust' set up before death, 'Testamentary Trust' set up as a result of a death!

    http://www.sars.gov.za/ClientSegment...-of-Trust.aspx

    Taxation as above.

    Davis Tax Commission dealt with Trusts, conclusion is IVT will increasingly be under the spotlight for tax avoidance measures this is however not confined to SA, worldwide trend.

    Not a flash in the pan answer to this question.

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    Default Re: Assistance with will - Trust Fund still the best?

    Praat met u eksekuteer.

    vir kinders onder 18 is daar baie spesifieke prosedures om te volg, anders gaan lę daai geld in die staats-koffers tot hulle 18 is ....

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    Default Re: Assistance with will - Trust Fund still the best?

    Quote Originally Posted by Apocalypse View Post
    I've had conflicting advice on the issue - from attornies and accountants.

    the best thing to do is to get advice and do some research yourself on the pros and cons.


    I have recently opened a trust for some assets - my accountant says I'm nuts, my lawyer says great stuff.
    Sometimes, and only sometimes - an accountant knows better

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    Default Re: Assistance with will - Trust Fund still the best?

    Quote Originally Posted by Ricoffy View Post
    Sometimes, and only sometimes - an accountant knows better
    A good lawyer would never admit to such a thing!

    Actually, yes, the Accountant is right - for accounting reasons
    The Attorney is also right for legal reasons

    Neither one of them is actually considering what I want to achieve - and for what I want to achieve, it is right for me...

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    Default Re: Assistance with will - Trust Fund still the best?

    Quote Originally Posted by Anton Meyer View Post
    It is still a good idea for minor beneficiaries as the trust then pays income tax at the rate of a normal taxpayer and not the punitive trust tax rates.

    With the new legislation regarding interest free loans to trust / higher taxation of trust in general it is bound to become less attractive, but still very useful in certain circumstances as it still holds a lot of other benefits. These days it would be recommended to consult with a professional, but to qualify this, not a professional that sets up trust as you are likely to end up with more than 1 trusts that you will not use / need.

    You can still make use of a trust for risk protection, or if you want to transfer assets, but if the value of assets exceed R2,4 million (assuming this is split between 2 spouses) then the new loan account legislation will kick and annual donations tax will become payable when this amount is exceeded. Stil helps to prevent the painful process of winding up an estate, which in itself is a major benefit, especially the way our Master's Office functions these days.

    Sounds like you already received advice on the matter, so hopefully your questions have been answered.
    Section 7(C) I believe yes.

    SARS now wants to hit you with 20% on the percentage interest you're charging below what is prescribed I believe.

    Agreed.

    A trust is still a good thing, no real tax advantages anymore, but it gives you flexibility.

    It is more complicated that one would think and trusts are used for various different purposes.

    Get professional advice. If you get it wrong, you very likely could find yourself in a position where any benefit gets taxed in your beneficiary's hands before he has received the benefit for years to come.

    Correct wording is everything in a trust, as is the primary objective.

    Leave this to the professionals. Trust me on this.
    Nico Swart

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    Default Re: Assistance with will - Trust Fund still the best?

    Quote Originally Posted by Die SwartKat View Post
    Section 7(C) I believe yes.

    SARS now wants to hit you with 20% on the percentage interest you're charging below what is prescribed I believe.

    Agreed.

    A trust is still a good thing, no real tax advantages anymore, but it gives you flexibility.

    It is more complicated that one would think and trusts are used for various different purposes.

    Get professional advice. If you get it wrong, you very likely could find yourself in a position where any benefit gets taxed in your beneficiary's hands before he has received the benefit for years to come.

    Correct wording is everything in a trust, as is the primary objective.

    Leave this to the professionals. Trust me on this.
    One of the best answers.
    Yes it can be very good but can quickly turn into a nightmare.
    Wording in trust is crucial and especialy regulating instructions. If you not carefull even the trust manager can take max admin fees as prescribed. Eg if you make a bank the trust admin they will take whatever they can. Make sure you properly describe functions etc of a trust.

    Bottom line get professional guidance and if you can speak to a deceased estate administrator. They work daily with estates and know the intracasies and pitfalls of trusts. General lawyers have legal knowledge but the adminitrators have the experience


    Also

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    Default Re: Assistance with will - Trust Fund still the best?

    Quote Originally Posted by ChrisF View Post
    Praat met u eksekuteer.

    vir kinders onder 18 is daar baie spesifieke prosedures om te volg, anders gaan lę daai geld in die staats-koffers tot hulle 18 is ....
    Above is a very important consideration for anyone with children under 18. Also need to stipulate who acts as guardian to your children. The most obvious or well meaning candidate in the family may not be the best.

    My grandparents would have been too old, so my parents nominated my godmother. Fortunately never came into play, but in retrospect they were very insightful.

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  21. #17
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    Default Re: Assistance with will - Trust Fund still the best?

    Quote Originally Posted by Apocalypse View Post
    A good lawyer would never admit to such a thing!

    Actually, yes, the Accountant is right - for accounting reasons
    The Attorney is also right for legal reasons

    Neither one of them is actually considering what I want to achieve
    - and for what I want to achieve, it is right for me...
    Alex THIS is so important !

    Most people get flabbergasted by all the terms and jargon and are numb long before getting to the "fine print" ....

    And sadly, accountants and lawyers are also business people .... sometimes, just sometimes, their advise might be tainted by their own long term fees ....



    A good friend WAS our executor ... sadly he was fixated on a trust that made sure HE would be getting fees into his 3rd generation .... Eventually moved my business.


    what is "right" for the one wont be for the next person ....

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