Who Is the Best Person to Set Up a Trust?
Setting up a family trust is a vital step for individuals who want to ensure the long-term financial security of their loved ones while safeguarding assets. At Burger Huyser Attorneys, we often receive questions about who can establish a family trust, who should consider doing so, and the potential advantages and disadvantages of this legal structure. Let’s explore these aspects in detail.
The best person to set up a family trust depends on the purpose of the trust and the assets involved. Typically, individuals with substantial assets, such as property, investments, or business interests, benefit the most from setting up a family trust. Key factors to consider include:
- Asset Protection: A trust can protect assets from creditors, divorce settlements, and other potential risks.
- Estate Planning: Trusts are ideal for individuals who want to simplify the inheritance process and minimize estate duties.
- Tax Efficiency: High-net-worth individuals often use trusts to manage tax liabilities effectively.
In most cases, the individual setting up the trust (the settlor) appoints trusted family members or professional trustees to manage the trust.
Who Can Legally Set Up a Family Trust?
In South Africa, any legally competent individual over the age of 18 can set up a family trust. The process involves:
- Drafting a Trust Deed: This document outlines the terms, conditions, and beneficiaries of the trust.
- Appointing Trustees: Trustees are responsible for managing the trust in the best interests of the beneficiaries.
- Registering the Trust: Trusts must be registered with the Master of the High Court.
Professional legal guidance is essential to ensure compliance with all legal requirements.
Who are the Best Candidates to Set Up a Family Trust?
A family trust may be an excellent option for:
- Entrepreneurs: To protect personal assets from business risks.
- Parents with Minor Children: To ensure financial provision for children in case of the parents’ death.
- Individuals with Complicated Family Dynamics: Trusts can provide clear guidelines on how assets are distributed, reducing potential conflicts.
However, it is not suitable for everyone. Consulting a legal expert is crucial to determine if a trust aligns with your goals.
Disadvantages of a Family Trust
While family trusts offer many benefits, there are some drawbacks to consider:
- Complexity: Setting up and managing a trust requires careful planning and ongoing administration.
- Costs: Initial setup and maintenance fees can be significant, especially if professional trustees are appointed.
- Loss of Control: Once assets are transferred to the trust, they no longer belong to the settlor.
- Tax Implications: Trusts are taxed differently, which can lead to higher tax rates in some cases.
Who Can Help Set Up a Family Trust?
Setting up a family trust is a complex process that requires specialised legal and financial knowledge. At Burger Huyser Attorneys, our experienced legal team can guide you through every step, including:
- Assessing your specific needs and goals.
- Drafting a comprehensive and legally compliant trust deed.
- Advising on the selection of trustees and beneficiaries.
- Ensuring proper registration and ongoing compliance.
Whether you are considering setting up a family trust or need advice on managing an existing one, Burger Huyser Attorneys is here to help. Contact us today for expert guidance tailored to your specific needs.
Contact Burger Huyser Attorneys, and book a consultation.
To speak to one of our experienced attorneys in South Africa for immediate assistance, contact us on the numbers below:
Randburg call 061 516 6878; Roodepoort call 061 516 0091; Sandton call 064 555 3358;  Pretoria call 064 548 4838;
Centurion call 061 516 7117; Alberton call 061 515 4699; Bedfordview call 061 536 3223
DISCLAIMER: Information provided in this article does not, and is not intended to constitute legal advice. READ MORE