What Is a Trust in the Context of Estate Administration?
A trust is a legal arrangement where assets are held and managed by trustees for beneficiaries, as specified in a will or trust deed. In estate administration, trusts protect assets, reduce estate duty, and ensure funds benefit heirs.
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How Can a Trust Benefit My Estate Plan?
Trusts minimize estate duty, protect assets from creditors, and ensure funds are managed for beneficiaries (e.g., minors or disabled heirs). They provide control over how assets are used.
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What Is the Difference Between a Testamentary and Inter Vivos Trust?
A testamentary trust is created by a will and activates after death, often for minors or specific needs. An inter vivos trust is set up during your lifetime, offering immediate asset protection and tax benefits.
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Who Can Be a Trustee in a South African Trust?
Trustees must be over 18, mentally capable, and not disqualified (e.g., insolvent or convicted of fraud). They can be family members, professionals, or independent trustees, approved by the Master of the High Court.
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What Are the Duties of a Trustee in Estate Administration?
Trustees manage trust assets, act in beneficiaries’ best interests, maintain records, and comply with the Trust Property Control Act. They distribute funds as per the trust deed or will, often during estate administration.
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Can a Trust Be Used for Minor Beneficiaries in an Estate?
Yes, a testamentary trust is ideal for minors, holding their inheritance until they reach a specified age (e.g., 18 or 21). It avoids the Guardian’s Fund and ensures funds are used for their care or education.
Planning for minors? Louwrens Koen Attorneys can set up a trust.
How Does a Trust Reduce Estate Duty?
Assets in an inter vivos trust are not part of the deceased’s estate, reducing the taxable value for estate duty. Testamentary trusts can also defer tax by managing distributions to beneficiaries.
Contact Louwrens Koen Attorneys for assistance in setting up an inter vivos trust.
Can a Trust Be Changed or Terminated After It’s Created?
Inter vivos trusts can be amended or terminated if the trust deed allows and all parties agree. Testamentary trusts, created by a will, are harder to change post-death unless authorized by the High Court.
Need to modify a trust? Contact Louwrens Koen Attorneys for legal advice.
What Happens to a Trust During Estate Administration?
If a will creates a testamentary trust, the Executor transfers assets to the trust during administration. For existing inter vivos trusts, trustees continue managing assets independently of the estate process.
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Are There Costs Associated with Setting Up or Managing a Trust?
Costs include legal fees for drafting the trust deed, registration with the Master of the High Court, and trustee fees (often a percentage of assets). Ongoing administration may incur accounting or tax compliance costs.
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