What are the 3 types of trust?
With that said, revocable trusts, irrevocable trusts, and asset protection trusts are among some of the most common types to consider. Not only that, but these trusts offer long-term benefits that can strengthen your estate plan and successfully protect your assets.
What is the difference between a trust and estate?
Estates function as a one-time transfer of assets that are distributed after death. Trusts, in contrast, allow the trust creator (the trustor) to establish an ongoing transfer of assets to beneficiaries before and after death.
Do trusts pay tax in South Africa?
Where the trust itself is taxed, it is taxed at a flat rate of 45%. Special trusts are taxed on a sliding scale from 18% to 45% (same as natural persons). Top Tip: Trusts do not qualify for any of the rebates provided for in Section 6 of the Income Tax Act.
How much does it cost to set up a trust in South Africa?
Setting up a trust can cost between R4,000 and R12,000. Careful consideration must be given to the wording of the trust deed because you want to ensure that the trust is both tax effective, and also that your family will continue to benefit when you die.
How do trusts work in South Africa?
There are two types of living trusts in South Africa, namely vested trusts and discretionary trusts. In vested trusts, the benefits of the beneficiaries are set out in the trust deed, whereas in discretionary trusts the trustees have full discretion at all times about how much each beneficiary is to benefit.
What are the disadvantages of a trust?
One of the disadvantages of a Trust are that Trusts are very difficult to understand. Historically, trusts used language that was specific to the legal field. For those that were not trust and estate lawyers, it was almost impossible to understand.
What are the 4 types of trust?
The four main types are living, testamentary, revocable and irrevocable trusts. However, there are further subcategories with a range of terms and potential benefits.
What are the benefits of a trust in South Africa?
Trusts benefit from total asset protection and, as such, ensure that properties cannot be seized by creditors. Because a property in a trust no longer falls into one’s personal estate, it is not subject to inheritance tax. Trusts also do away with estate executor fees.
Who owns the property in a trust?
Trustees
Trustees. The trustees are the legal owners of the assets held in a trust.
Is it a good idea to put your house in trust?
With your property in trust, you typically continue to live in your home and pay the trustees a nominal rent, until your transfer to residential care when that time comes. Placing the property in trust may also be a way of helping your surviving beneficiaries avoid inheritance tax liabilities.
What are the negatives of a trust?
What are the Disadvantages of a Trust?
- Costs. When a decedent passes with only a will in place, the decedent’s estate is subject to probate.
- Record Keeping. It is essential to maintain detailed records of property transferred into and out of a trust.
- No Protection from Creditors.
Can a house in trust be sold?
Other Benefits of a Property Protection Trust Will
For example, the surviving spouse can move house, downsize etc. The terms of the Trust will still apply to the new house. They cannot sell or spend the trust funds but the trust can be transferred to another house.