Estates, Wills and Trusts
Not all people who find themselves having to deal with Trusts understand what it is all about, therefore in this brief discussion we will highlight the prominent issues that one has to familiarise themselves with in order to safeguard their interests when dealing with a Trust.
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Since it is a matter of practice and not one premised on the provisions of the law, the requirement to appoint an independent Trustee may be dispensed with in the event that good cause is shown that the interests of creditors will not be compromised.
There is absolutely no requirement at law that a Trustee must be a professional, but that such person must be a major and have an appreciation of what is expected of them, the duties they are accepting and capacity to discharge such responsibilities.
The essence behind a Trust is for the Trust to own property in its own right so that such property does not form part of the estate of the Trust Founder. A Trust, however, does not have legal personality. The Trust can therefore acquire and accumulate properties and assets as a separate entity from the Trust Founder and persists even after the Trust Founder has passed on.
The responsibilities of an Executor are fiduciary in nature and thus the Executor must at all times be honest, diligent, truthful as well as to see that the process is endowed with fairness and compliance. In the event that the Executor conducts themselves in a way that is detrimental to the proper administration of the deceased estate, there are provisions for the removal of such Executor.
A Will is designed to capture the wishes of the deceased with regards to how they prefer their estate to devolve to the nominated heirs. Such Will contains instructions as to how assets must be distributed to the heirs under that estate and in some instances, who must preside over such process (Executor).
In terms of the Trust Property Control Act 57 of 1988 (the Act) the definition of a Trust can be paraphrased as, a design whereby a person’s ownership interest in assets is, by way of a trust instrument, put under the care, control and trust of other persons referred to as Trustees and/or beneficiaries, for the benefit of nominated beneficiaries.
The essence behind a Trust is the transfer of ownership of property from the Trust Founder to the Trust, while putting its control under the Trustees, for the advantage of the beneficiaries. The duties and responsibilities of the Trustees are fiduciary in nature and as such they must perform them with good faith, honesty, diligence, skill and uphold the best interests of the Trust and its beneficiaries.
The assumption of a position or office comes with specific responsibilities and duties. The anticipation is that the bearer will perform the duties as required and expected, within set confines. These parameters are what define roles so as to achieve coordinated and oriented outcomes.
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