Paul Fyfe Financial Planning © Authorised Financial Services Provider No 13557 and a division of the Fyfe Group of Companies
Setting up A Trust.
Testamentary Trust.
There are many forms of trusts. You can have a special trust, a personal trust, a foreign trust or a charitable trust. And a Inter Vivos Trust. However here we will concern ourselves with a Testamentary Trust.
Testamentary Trust
The Testamentary Trust is embodied in the will of the founder (testator/rix) and is a legal act. It comes into existence at the death of the testator/trix.. However it can be postponed until at later stage say the remarriage or death of the testator’s spouse.
The Testamentary Trust is usually formed where minors may involved. The estate or a portion of it may be bequeathed into trust for the Trustees to administer on behalf of the minors until a determinable date i.e. Majority or age 25. It is also common to form a Testamentary Trust for the benefit of a charity/ies.
A trust exists when the creator of the trust, whom we normally call the founder, hands over to another, control of property/assets which, or the proceeds of which, is to be administered in terms of a trust deed for the benefit of some person other than the trustee as beneficiary, or for some impersonal object.
A trust in this sense creates a fiduciary obligation and is a species of the genus “trust” in the wide sense.
The trustee appointed holds office and is subject to public control by the Master of the Supreme Court.
What is an Inter Vivos Trust.
A trust is a legal entity which is created by a person (Donor, Settlor or Founder) through a legal agreement and the donating or sale of assets under the control of another person (the Trustee) during the Founders lifetime (inter vivos).
The Family Trust has been a well known feature of South African Estate Planning with growth assets typically sold to the Inter Vivos Trust, leaving the Trust owning the assets and a liability or loan to the planner.
Recent court cases have reminded us of the fact that the trust, represented by the trustees are responsible for management and decision making. The planner is a separate entity and must not treat the assets as if they were his own. Where family members are involved the planner should appoint and independent outsider as trustee. Regular meetings should be held and carefully minuted.
An Inter Vivos Trust is created by an agreement entered into during the lifetime of the founder.
financial Planning is the process of determining how an individual can meet their life goals through the proper management of their financial resources. Life Goals can include a comfortable retirement, buying a home, saving for a child’s education or starting a business.
The Financial Planner is a trained and qualified professional who uses the Financial
Planning process to help clients figure out how to meet these goals. He will take
a “big picture” view of your financial affairs and make recommendations based on
your needs, lifestyle, -
Financial Planning consists of six distinct steps. It is this six step approach that sets financial planners apart. Call today for a free six step analysis.
