The law requires all trustees to act independently and impartially. In most family trust setups the founder, trustees, and beneficiaries are all related to one another and act in more than one capacity (being a beneficiary and trustee). In a setup like this, it can be very difficult for the trustees to act independently and impartially. This can defeat the purpose of the establishment of the trust and can leave the trust open to an attack as a sham or an invalid trust. In order to reduce the risk of trust assets being regarded as your personal assets, and leaving them exposed to 3rd parties, it is crucial to appoint an independent trustee. Most Masters of the High Court now also require the appointment of an independent trustee in addition to the trustees who are beneficiaries of the trust. An independent trustee will be a person who is not related to the founder, trustees or beneficiaries, and who derives no benefit from the trust assets. The independent trustee plays a crucial role in ensuring better management and administration of the trust. The most important benefits of appointing an independent trustee are that it ensures the following: objectivity to how the trustees deal with trust assets; compliance with the provisions of the trust deed and statutory requirements; all trust beneficiaries are treated fairly; conducting proper trustee meetings; recording minutes of all meetings and major decisions by the trustees For any advice on trusts, please contact us – or...
Who Should We Provide your Trust Fund Management Services? Since the main purposes of setting up a trust fund are to protect and to grow one’s assets, choosing who is best able to provide the necessary management services is a decision that needs careful thought. It may also depend upon the version of this financial instrument that is to be used and this takes two possible forms. These are known as living and testamentary and are applicable, respectively, to a financial instrument established during the life of the owner (grantor) and to one decreed in a last will and testament, and which will, therefore, only be established upon the death of the grantor. Of course, in the case of the type known as a living trust, one possible solution could be for the owner of the fund to assume the responsibility for providing the management services in person. To do so, however, will require them to have a sound knowledge of the investment market and its trends as well as having sufficient time and the discipline to maintain accurate records, handle any tax liabilities and to make the necessary payments to beneficiaries. Because it is often impractical for the owner to meet all of these commitments, it is more usual to delegate the task to a trustee who may be a friend, a family member or a professional individual or company specialised in this area. It is, therefore, important that trusteeship is seen not as an honour but as a serious responsibility. One possible alternative to this route is a hybrid arrangement in which the trustee remains responsible for...
The Purpose and Main Benefits of Establishing a Trust Fund Trust funds are not, as many people tend to believe, the sole province of the multimillionaire. However, despite their many potential benefits, they are not a suitable financial instrument for everyone’s purpose. In essence, the term applies to a legal document or deed that may be established by either an individual or a corporation, thereafter known as the grantor. The deed sets out the terms for the management of property and other assets held on behalf of a beneficiary that, once again, may either be a named individual or a group such as a charity. The person or persons to whom the task of management is then assigned are known as the trustees and may be the grantor, a close friend, a family member or a legal or financial professional. The main purpose of a trust fund is asset protection and to provide assurance that property, money and other assets it includes are allocated in accordance with the grantor’s wishes in the event of their demise. A task for the trustees, it serves to avoid unnecessary pressure on the bereaved family members, saving them time, expense and the often-confusing paperwork that are involved when filing probate. Aside from relieving the bereaved family of burdensome legal requirements, there are many other benefits to be gained when choosing this route rather than simply compiling a last will and testament and appointing an executor. A will is simply a means to clarify ones’ wishes regarding the distribution of one’s assets but it offers no means by which to protect those assets. In...
The Responsibilities of Estate Handling Services in South Africa Whilst in the midst of enjoying our lives, it is all too easy to overlook the simple fact that each of us must, at some time, confront the inevitability of death. In practice, this has long been a prospect that many choose to avoid contemplating more than superficially and, as a result, it is an eventuality for which such individuals tend to make provision only at the last moment, if they do so at all. While this policy of avoidance may help to shield them from the reality of their mortality, upon their demise, it can have serious or even devastating consequences for those loved ones whom they have left behind. Imagine, for instance, being unexpectedly widowed and left, not only with the cost of a funeral to meet, but with a string of unpaid debts and insufficient funds with which to settle them. What might it be like having to face all of this at a time when your prime need is to mourn? A chastening thought indeed and one that should prompt anyone who claims to love his or her family to take a closer look at how the help of one of the country’s professional estate handling services could ensure that he or she need have no such concerns about their future financial security. What then should one expect from a firm entrusted with this task? What precisely are its responsibilities? For convenience, these may be divided into those associated with the planning phase and those that are required for the subsequent execution of whatever plan...
Professional Assistance with Managing Trust Funds and More For the average citizen anywhere in the world, being faced with the need to deal with legal matters is a prospect that they would rather avoid. Without, at least, some basic knowledge of the pertinent laws, even relatively basic legal undertakings such as drawing up a will, drafting an anti-nuptial agreement or, all too commonly, completing divorce papers, are tasks that can be confusing and fraught with hidden pitfalls for the layman. Of the three tasks cited, it is perhaps the first of these that people are, albeit unwisely, most often tempted to tackle as a do-it-yourself project. It seems straightforward enough. You know more or less what you have and who you want to give it to so what could go wrong? Well firstly, the value of your assets is not cast in stone. In practice, without some form of protection, it could be eroded considerably by the time of your demise due to a combination of duties, costs and inflation. Trust funds, however, can be a very effective means with which to avoid this erosion, although you would be well advised to seek some professional assistance should you decide to set one up. And, while you’re at it, you should probably consider getting a little more expert help with the drafting of your will. Completing all of the necessary paperwork correctly is, of course, only a beginning. When the time comes to implement your wishes, you will need a third party to handle your deceased estate. Once again, you would be well-advised to make your choice with care. Filing...
