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Trusts
Assets transferred to a trust, will not be included as property in your estate and, as such, no estate duty is payable on those assets. Assuming that the assets are transferred to a trust through a sale on loan account, the outstanding balance of the loan will, however, constitute an asset in your estate and thereby attract estate duty.
By contrast, a transfer to a trust through a donation of the asset, will attract an immediate liability for donations tax at a rate of 25%.
The two most common trusts are the testamentary trust and the inter vivos trust.
A testamentary trust is a trust, the terms and conditions of which are set out in a will. It is established upon the death of the estate planner. The benefits of such a trust include: The protection of assets. The minimisation of future estate duty for beneficiaries. The welfare of minor heirs, spouse and any other beneficiaries
An inter vivos trust is a trust set up through a contract drawn up and put into operation during a person's lifetime. It will continue to operate without interruption upon the death of the estate planner. It has the same benefits as a testamentary trust, but, in addition- There is no delay in the implementation of the trust after death, as the trust is already established and operative. The planner can be a trustee and/or a beneficiary during his lifetime, provided that he is not the only trustee and beneficiary. The pegging of the value of assets held by the trust these are the vehicles through which an estate can be planned.
To set up a trust is not difficult nor expensive( just remember the early fees), but you must have some expert to help you add your assets to it. Contact us and we will let a expert contact you to set up one or give you advice.
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