Category Archives: Trusts

The benefits of creating a trust

Trusts are well-known to facilitate effective estate planning and continuity planning strategies. That said, setting up a trust – whether an inter vivos (between the living) or a testamentary (created in a will) − should be carefully considered and not just implemented blindly.

The difference between testamentary and inter vivos trusts

  1. A testamentary trust is established when a person (the founder) makes provision for establishing a trust in their will. The trust does not come into existence until the founder dies.
  2. An inter vivos trust is set up between the living. In other words, property is transferred before death to the trust by its founder and managed by the trustees for the benefit of another person or persons.

The death benefits of creating an inter vivos trust exceeds the cost – both in time and money. According to The Estate Duty Act, upon death, a duty is levied against your estate known as estate duty. The nett value of any estate will be determined by deducting all liabilities from your assets of your estate, both real and deemed.

Should you create a testamentary trust, upon death the assets are in your name and will need to be transferred to the trust posthumously, meaning all assets are taken into account when assessing the duty payable.

Advantages

Taking the above into account, here are some benefits you could experience from creating a trust:

  1. Reducing estate duty: Inter vivos trusts can be used to minimise estate duty. No estate duty should be payable on assets owned by the trust as a trust does not die.
  2. Protection against creditors: As the trust’s assets are not owned by the beneficiaries, creditors do not have a claim on the assets. This advantage is especially important for people who could be exposed to potential liability. Companies as well as individuals are able to transfer assets into trusts.
  3. Efficient succession: Since trusts never die, beneficiaries will be able to continue enjoying the assets if one beneficiary were to pass away.

Disadvantages

Despite the advantages, there are also some disadvantages of having a trust. They include the following:

  1. Costs: The costs of setting up a trust can be high. If assets are transferred into the trust, then transfer duty needs to also be paid.
  2. Duties of trustees: Trustees could find themselves personally liable for losses suffered by the trust if it can be proven that they did not act with care, diligence and skill according to Section 9 of the Trust Property Control Act.

References:

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)

So wanneer is ek by magte om as trustee op te tree?

A1_bDie Wet op Beheer van Trustgoedere 57 van 1988 definieer ‘n trustee as “enige persoon (ingesluit die oprigter) wat optree as trustee uit hoofde van ‘n magtiging in terme van Artikel 6.”

In die saak van Lupacchini teen die Minister van Veiligheid en Sekuriteit (16/2010) [2010], ZASCA 108 (17 September 2010), is die posisie van ‘n trustee wat sonder die nodige magtiging opgetree het, oorweeg, waar die trustee regstappe gemagtig het.

‘n Trust wat tot stand kom deur ‘n trustakte is nie ‘n regspersoon nie – maar ‘n spesiale verhouding beskryf deur die skrywers van Honoré’s South African Law of Trusts[1] as “a legal institution in which a person, the trustee, subject to public supervision, holds or administers property separately from his or her own, for the benefit of another person or persons or for the furtherance of a charitable or other purpose.”

Alhoewel die trust eiendom in elke trustee individueel vestig, moet hulle gesamentlik optree, tensy die trustakte anders bepaal. Hulle individuele belange negeer nie die vereiste dat hulle saam moet optree nie.

Die gevolg van ‘n handeling wat in stryd met ‘n statutêre verbod gepleeg is, is al telkemale oorweeg in ander sake, en dit hang af van die behoorlike konstruksie van die wetgewing en die bedoeling van die wetgewer.

Die doel van die wet is om die Meester in staat te stel om toesig oor trustees te kan hou en hulle administrasie van die trust en Artikel 6(1) is essensieel hiervoor, en om die trustees te belet om op te tree alvorens hulle gemagtig is deur die Meester, verseker die wet dat trustees net kan optree as hulle sodanig voldoen aan die wet.

In Kropman NO teen Nysschen[2] is bevind dat ‘n hof die diskresie het om handelinge van ‘n trustee wat sonder die nodige magtiging opgetree het, terugwerkend goed te keur. Hierdie standpunt is met oortuiging in latere sake verwerp.

Locus standi in iudicio” daarenteen is iets anders en is nie afhanklik van die magtiging om op te tree nie, maar hang af of die litigant geag word deur die hof om ‘n genoegsame belang in die litigasie te hou.

Alhoewel Artikel 6(1) ‘n trustee se bevoegdheid om in daardie hoedanigheid op te tree opskort, kan hy of sy ‘n genoegsame belang in die administrasie van die trust hou om locus standi te hê.

Die essensie van die verbiedende frase in artikel 6(1) “… shall act in that capacity only if authorised thereto …”, moet geïnterpreteer word om te bedoel dat ‘n trustee nie voor die Meester se magtiging, enige regte mag bekom vir of kontraktueel verpligtinge aangaan namens, die trust nie en is nie bedoel om die kwessie van locus standi in iudicio te reguleer nie.

Litigasie wat ingestel word deur ongemagtigde trustees en kommersiële transaksies wat die trust bind, is ongeldig en nietig.

[1] 5th ed (2002) by Edwin Cameron with Marius de Waal, Basil Wunsh and Peter Solomon para 1.

[2] 1999 (2) SA 567 (T) at 576F.

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)