WHY OPEN A TRUST?

A family trust is an excellent vehicle for wealth management in South Africa for families, irrespective of your age or assets.  The benefits of holding assets in a trust include:

• protecting your personal assets from creditors, including SARS;
• lowering any income tax and capital gains tax incurred on the assets held by the Trust by vesting such gains and income in multiple beneficiaries;
• ensuring on-going wealth for future generations.

WHY HAVE A WILL?

The critical benefits of a Will include ensuring that:

• your assets are distributed among your family as you intend, rather than in terms of the laws of intestate succession;
• you select an executor to handle the administration of your estate;
• you select a legal guardian for any minor children you may have;
• your personal assets fall into your overall estate plan.  

HOW MUCH TAX DOES A TRUST PAY?

Without any proper management, a trust will pay the maximum marginal tax rate of 45% on all income and an effective 36% on capital gains, however these rates can be reduced to 18% income tax and an effective CGT rate of less than 10% by ensuring sound trust administration and vesting of income and gains in the beneficiaries in the financial year in which they are accrued.  

HOW LONG DOES A TRUST LAST AND WHO CONTROLS THE ASSETS?

• A trust will continue in perpetuity unless the trustees determine otherwise or unless the Trust Deed states otherwise. 
• The trustees control the assets of the trust for the benefit of the beneficiaries.  

DO I NEED TO HAVE AN INDEPENDENT TRUSTEE?

No, it is not necessary, however it is strongly advisable to include an independent trustee.  

HOW MUCH DOES A TRUST COST TO SET UP?

• The fees for establishing a Trust vary among legal practitioners between R5 000 and R25 000. Shepstone & Wylie is currently charging a once-off fee of R9 500 plus VAT for the establishment of an inter vivos discretionary trust, which includes the drafting of the Trust Deed, payment of Master’s Office fees, registration of the Trust with the Master and an initial estate planning consultation.
• Shepstone & Wylie’s current fee for Wills for two spouses is R5 000 plus VAT.