Trusts - Crest Trust Services

By: Crest Trust  11-11-2011
Keywords: Estate Planning, Income tax, Last Will And Testament

- PROTECT AND PRESERVE YOUR ASSETS -

A Trust is a legal relationship whereby assets are placed under control of another person for the benefit of a third party.

Our trust service includes facilitation of the administration of testamentary trusts which are created in a Last Will and Testament and which becomes operative upon the death of the testator. Inter vivos trusts are established during the lifetime of the Founder, by way of a deed of trust.

The administration of any trust involves the following:

  • Managing assets and investments.
  • Managing relationships between beneficiaries and Trustees.
  • Compliance with relevant legislation - Trust Property Control Act, Income Tax Act, Exchange Control Act etc.

Types of Trusts

Trusts generally have a very wide application and can be tailor-made to meet specific needs. There are a variety of reasons why a trust should be established:

  • Safe guarding assets for minor beneficiaries.
  • To honour maintenance commitments in terms of a divorce order and settlement agreement.
  • Providing for disabled dependants and aged parents.
  • Protecting and providing assets for following generations.
  • Serving as a holding vehicle for assets as part of an estate planning structure.
  • Providing a regular income for favourite charities and other PBO's.
  • Providing for the dependants of a deceased employee.

Key aspects

The administration of a trust requires that the Trustees exercise due care and diligence. There are a number of important principles that come into play:

  • Giving effect to the trust instrument (i.e. the Deed of Trust, or the Will).
  • Exercising any discretion given to the Trustees independently.
  • Observing the utmost faith.
  • Using greater care in trust property than the Trustee would in dealing with his own.
  • Avoiding any conflict of interest.

Duties of Trustees

The fiduciary responsibility of a trustee is onerous:

  • Keeping a balance between present and future beneficiaries, where the interests of one cannot outweigh those of the other.
  • Treating all beneficiaries impartial.
  • Establishing a balance between the production of income and the protection of capital.
  • Ensuring that the property of the trust retains its value, and where possible, appreciates.
  • Keeping trust property in a proper state of repair.
  • Switching speculative investments awarded in trust, to safer investments.
  • Investing surplus funds timeously.
  • Making sure that co-trustees act prudently.
  • Reviewing the trust regularly.
  • Submitting statutory returns, such as tax returns, timeously.
  • Recording important decisions in writing.
  • Honouring the wishes of the Testator or Founder.
  • Entertaining requests for assistance from beneficiaries.

Keywords: Estate Planning, Income tax, Last Will And Testament, Will And Testament

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