Expert Advice On Inter Vivos, Mortis Causa, Special and BEE Trusts

Due to its inherit flexibility the trust has, since its commercial acceptance in South Africa in the early 80’s, taken the estate planning fraternity by storm.

”The trust was imported in South Africa by common usage after the British occupation of the Cape in 1806. It is now a vibrant and authentic institution of modern South African Law, for which the courts have devised distinctively South African rules and principles, and for which new uses are constantly being devised.”
- Honoré

“If we were asked what is the greatest and most distinctive achievement performed by Englishmen in the field of jurisprudence I cannot think that we should have any better answer to give than this, namely, the development from century to century of the trust idea.”
- Professor Maitland

"Trusts have now pervaded all fields of social institutions in common law countries. They are like those extraordinary drugs curing at the same time toothache, sprained ankles and baldness, sold by peddlers on the Paris boulevards; they solve equally well family troubles, business difficulties, religious and charitable problems. What amazes the sceptical civilian is that they really do solve them.”
- Pierre Le Paulle

The many uses of the trust include, to name but a few:
Estate and Tax planning;
Asset protection;
Provision of continuity;
Protection for minors and persons incapable of managing their own affairs;
Achievement of charitable, educational and ecclesiastical purposes;
Black Economic Empowerment.

In the preface of the second edition of the book Trust Law and Practice, Gert van den Berg, of Delport van den Berg Estate & Trust Services sounded the following concern:

“One of the greatest dangers associated with a relatively new legal institution such as the trust is that the injudicious utilisation, and even misuse thereof, as the result of a lack of knowledge on the part of the practitioner, can lead to restrictive legislation and over-regulation of the trust. Without the trust our legal system would, without a doubt, be much poorer.”

Unfortunately, these concerns proved not to be without substance and, amongst others, the abuse of trusts on the advice of certain ignorant advisers has led to the trust being perceived by the government and SARS as basically a vehicle to avoid tax with resulting strict and often unfair – for the innocent – tax legislation. Lately we have seen new legislation and recommendations by the Davis Tax Committee, which can unfortunately, to a certain extent, undermine the very essence of the trust. However, with careful planning and expert advice we are of the opinion that, notwithstanding this, the trust will still have an important role to play in the field of estate planning and will remain the estate planning vehicle par excellence.
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