The main objective of a trust is to acquire protection for personal or business assets. A properly drawn up trust will protect individuals and business owners from creditors should they face insolvency or liquidation
Source: http://mymoney.iafrica.com“The main objective of a trust is to acquire protection for personal or business assets. A properly drawn up trust will protect individuals and business owners from creditors should they face liquidation”.
No one wants to spend too much time mulling over their ultimate demise – But unless one of us stumbles on a magic elixir to prolong life, we have to face up to the fact that as members of the human race, we are mortal.
So we put contingency plans in place in the hope that to our loved ones and our assets are protected in the event of our death. However, Will Rogers, an American actor, philosopher and author was quoted as saying, “Anyone who dies with a will ought to come back and see how much trouble he has caused”. This statement seems to fly in the face of convention, for any good lawyer will tell you that a will is absolutely necessary to make sure your assets get distributed the way you want them to.
Well, just imagine that you’re sitting quietly at your desk, dreaming about fishing in Dullstroom, when your bank manager calls and tells you not to write any more cheques until further notice. The next day you find a registered letter in your mail-box informing you that your worldly assets are about to be listed and advertised so that creditors, claimants and the receiver can see what’s up for grabs. At the same time you are then informed that in the event of your assets being auctioned, there will be various costs and commissions for your account. Finally, you find out that the fees for this assault on the senses and pocket will amount to a minimum of 3.5% of the total value of your assets.
This is Executorship and you asked for it by writing a will and leaving it in the hands of your bank manager or lawyer to handle. Of course you had no idea that you’d asked for this, but when you sat down with your spouse to draw up your wills, you unwittingly condemned each other to between one and two years of added grief, lawsuits, paperwork and frustration.
The fact that your advisors did not point this out might have something to do with their potential for personal gain. Most advisors neglect to tell you about the time delays, privacy-invasion, fees, forced estate sales, auction fees and family feuding that can happen during the execution of a will.
So why would anyone willingly allow this to happen to his or her family? The answer is simple, they did not know what was coming or they did not know that there were much better alternatives. Avoiding the trauma and complications of executing your will is extremely easy. The answer is a Living Trust.
A Living Trust (also known as an Inter Vivos Trust) is one of the most significant achievements in Anglo-Dutch law. Like a corporation, a trust is a kind of “legal fiction” which takes on many of the rights and attributes of a person. The most basic definition of a trust is the holding of real or personal property for the benefit of the persons for whom the trust was created. It is a legal structure that’s been designed to accomplish several desirable goals, one of which is avoiding executorship.
Today, the Living Trust is the only legal tool available to devise a family master plan in private, with hand selected trustees.
Rob Velosa, partner at Cobus Bekker & Associates, specialists in corporate law and trusts says “The main objective of a trust is to acquire protection for personal or business assets. A properly drawn up trust will protect individuals and business owners from creditors should they face liquidation”.
How it works:
A Living Trust is a legal entity you create to take ownership of money or property. As its creator, you are the grantor. You appoint trustees; which should be two other people and yourself, or a financial institution.
As grantor, you decide who will be the manager. You can either appoint someone you trust, or do it yourself. The choice is entirely up to you, because the key issue of a trust is control.