Investment Trusts and Deeds From Psg Online
Investment Trusts and Deeds From Psg Online
Trusts are legal agreements which can be used as a formal tool for planning your investments. Trusts arrange for the holding and management of assets by a person, a corporation or an association with the intention of providing for the beneficiaries. Trusts lay down the rights and duties among the parties of a trust - trustor, trustee, and beneficiary. A trustor is one who transfers funds or assets to a trust. The person who holds the legal title to the trust is the trustee. It is the trustee who manages the trust's assets to behalf of the beneficiary. A person for whom the assets of the trust are held is the beneficiary. Trust fund is the term used to refer to the assets held in trusts.
Although many wealthy people use trusts for a variety of reasons, trusts are tools that can be used by anyone to accomplish certain financial objectives. A family trust can be used to split income between family members, reduce probate and estate duties, and protect the trust fund assets from creditors. Family trusts assist with safeguarding assets for future generations and ensure that your wishes are carried out while meeting the needs of your beneficiaries.
There are two types of trusts used for tax purposes. Namely, inter vivos trusts and testament trusts. Inter vivos is usually an investment trust setup while the trustor is still alive to manage the trust fund for the beneficiaries. This is often seen as a better alternative than simply handing over the asset to the beneficiary and ensures that the trust fund is used for the purposes intended by the trustor. Testament trusts are usually family trusts created in the will of the trustor and takes effect upon that person's death. Testament trusts name your heirs as beneficiaries of the trust fund, instead of leaving your assets to your family directly.
Before creating a trust fund you must decide what it is you wish to accomplish. You will also need to understand the income tax and legal implications associated with trusts. You will need to decide on several important issues including; who will act as trustee? What assets will be transfer into the trust fund? Who are the beneficiaries, and how will their needs of the trust beneficiaries be met? Will the trust come into effect before or after your death? Will the trust be revocable or irrevocable? And how long will the trust operate?
Estate planning involves managing a person's assets, which can be done through an investment trust, while they are alive and the distribution of those assets when that person passes away. Estate planning allows for the orderly administration and disposal of a person's estate, which is clearly defined in a family trust. Estate planning involves the process whereby a client's financial affairs in respect of his will, property, trusts, insurance, income tax and estate duty are restructured to achieve certain objectives.
The following aspects must be covered when estate planning:
Wills - Drafting of a legally binding Will to ensure a practical and equitable distribution of assets to heirs and minimising death duties; You can find out more about Wills and why they are important on the estate and trust advisory FAQ page.
Trust formation - To serve as a vehicle to own assets with the view of pegging the growth potential thereof and to protect the assets against the claims of creditors;
Asset restructuring - To separate business interests from personal investments;
Buy and sell agreements - Protecting partners in the event of the disability or death of one partner;
Succession planning - What will happen to the business interests of a sole proprietor?
Taxation - Donations tax, Estate Duty, Capital Gains Tax;
Offshore structures - The use of offshore structures for SA residents.
PSG Konsult Trustees Limited is a Corporate Trustee regulated and licensed by the Financial Services Commission of Mauritius to provide Corporate Trustee Services.
source: http://www.psgonline.co.za/plan/trusts.php
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