How to protect the
assets in your trust
Trusts remain one of the most effective mechanisms for consolidating, preserving and transferring wealth across generations. When properly structured, they offer both flexibility and a meaningful degree of protection. However, these outcomes are not automatic. A trust is only as robust as the way it is established and governed. Here’s what you need to know.
For families seeking to safeguard assets over the long term, the detail matters. Assets held in a trust can, when correctly structured, provide protection against:
How can you ensure that assets do indeed enjoy the appropriate protection?
An offshore trust must be established as an irrevocable discretionary trust. This means the founder should not retain the right to cancel the initial donation to the trust, and must remain appropriately distanced from the trust assets.
You must not exercise control over trust assets as if they are your own. You may be regarded as having such control if:
Refrain from dealing with trust assets as if they are your own. This includes, for example, transacting on a trust bank account without proper trustee authorisation, or issuing instructions on an investment account without the requisite authority from the trustees.
Appoint an independent trustee. An independent trustee is generally someone who is neither a beneficiary of the trust nor related to any trustee or beneficiary, and who can therefore exercise objective oversight.
If you’d like advice on whether your trust assets are adequately protected, wish to set up or review a trust, or want to appoint an independent trustee, please contact Stanley Broun on +27 (0)11 778 6648 or stanleyb@privatewealth.sanlam.co.za.
The formation and registration of trusts, and the provision of independent trusteeships – both local and offshore.
The creation of BEE, charitable, special and Shariah trusts compliant with regulatory and legislative requirements.
The administration of deceased estates in South Africa and abroad.
Advice on complex structures, asset restructuring and bequests in foreign jurisdictions.
Advice on emigration and immigration, foreign earnings and the application of any double taxation agreements.
Updating trust deeds to ensure they’re in line with the latest changes in the trust environment.
Updating and/or drafting of wills dealing with South African and/or foreign assets.
Advice on the establishment and management of charitable organisations, their tax status and tax deductible donations.
Advice on the potential tax consequences and reporting obligations if you hold a US passport or green card, or if you have children living in the US.
Guidance on the financial implications of life-changing events, such as getting married, divorce or the birth of a child.
