Setting up Trusts for Children

by | Sep 8, 2020 | MMS, Trust | 0 comments

Tags: Accounting
Reading Time: 3 minutes
Ensuring your family’s future financial security is usually done by setting up a Trust. Parents, guardians or grandparents may opt to set up a Trust by placing their assets into it which is will be for the benefit of their beneficiaries – usually their children or grandchildren.
The transferred property that appears in the Trust should be in accordance with the Trust Property Control Act no 57 of 1988. This Act states that responsible Trustees should be appointed to manage the Trust’s assets for the benefit of the beneficiaries. Setting up a Trust is a safe alternative to the Guardian Fund of the Master of the High Court (governments claim process) which is lengthy and involves significant red tape.
9-Sept-OG
10 Important considerations in setting up Trusts
  1. The role of a Trustee is to not look after the minor financially but to administer and manage the funds for the benefit of the beneficiaries.
  2. Trust assets are protected from creditors of the parents or grandparents which provide a ringfence around future financial certainty for the beneficiaries.
  3. A Trust has a separate legal identity and is liable for taxes.
  4. The bureaucratic process is avoided when making use of a Trust by providing ease of access to funds for the benefit of minors or the beneficiaries.
  5. Invested capital and interest can be used for the benefit or the maintenance of the minor(s).
  6. The benefits of a Trust far outweigh the tax implications of having one, but that is not to say that there are no tax implications.
  7. A Trust has to be managed by the Trustees.
  8. Choose reliable Trustees who you can have complete faith in to execute the duties required for the benefit of your beneficiaries.
  9. For the sake of accountability, always have more than one Trustee.
  10. It is always wise to seek the counsel of an accredited financial advisor on Trust matters.

If you require specialised trust accounting services and assistance in the taxation of local Trusts, look no further than our knowledgeable team. We provide reliable and efficient trust accounting and taxation services. Reach out to us by requesting a quote online.

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