I want to create a family trust. What are the requirements?

In South Africa, a trust is a legal arrangement that allows for the separation of ownership and control of assets. The trust is created by a founder who transfers assets to a trustee, who then manages and administers those assets for the benefit of one or more beneficiaries. The trust deed is the legal document that outlines the terms and conditions of the trust. Here are key elements and steps involved in how a trust works in South Africa:
  1. Formation: A trust is formed when a trust deed is drafted and signed by the founder and the trustee. The trust deed specifies the purpose of the trust, the beneficiaries, and the powers and duties of the trustee.
  2. Trustee: The trustee is a crucial figure in a trust arrangement. They are responsible for managing and administering the trust assets in accordance with the trust deed and for the benefit of the beneficiaries. Trustees have a fiduciary duty to act in the best interests of the beneficiaries.
  3. Beneficiaries: These are individuals or entities that stand to benefit from the trust. The trust deed will outline the rights and entitlements of the beneficiaries. It can be a fixed list of individuals or a class of persons, such as family members or charitable organizations.
  4. Assets: The founder transfers assets into the trust, effectively removing them from personal ownership. These assets can include property, investments, cash, or any other form of property.
  5. Administration: The trustee is responsible for managing the trust assets, investing them wisely, and distributing income or capital to the beneficiaries according to the terms of the trust deed.
  6. Duration: Trusts can be either inter vivos (created during the founder’s lifetime) or testamentary (created through a will and activated upon the founder’s death). They can also be discretionary, where the trustee has discretion in making distributions, or fixed, where the benefits are predetermined.
  7. Registration: The Master of the High Court is involved in the registration of a Trust, and certain information is submitted for record-keeping purposes.
  8. Taxation: Trusts in South Africa are subject to taxation. The Income Tax Act provides specific rules for the taxation of trusts, and it’s essential to comply with these regulations.
It’s crucial to seek professional legal and financial advice when setting up a trust in South Africa to ensure compliance with the relevant laws and to achieve the intended goals of the trust arrangement. Laws and regulations may evolve, so staying informed about any changes is essential.
Posted on by Telelaw

I want to create a family trust. What are the requirements?

In South Africa, a trust is a legal arrangement that allows for the separation of ownership and control of assets. The trust is created by a founder who transfers assets to a trustee, who then manages and administers those assets for the benefit of one or more beneficiaries. The trust deed is the legal document that outlines the terms and conditions of the trust.

Here are key elements and steps involved in how a trust works in South Africa:

  1. Formation: A trust is formed when a trust deed is drafted and signed by the founder and the trustee. The trust deed specifies the purpose of the trust, the beneficiaries, and the powers and duties of the trustee.
  2. Trustee: The trustee is a crucial figure in a trust arrangement. They are responsible for managing and administering the trust assets in accordance with the trust deed and for the benefit of the beneficiaries. Trustees have a fiduciary duty to act in the best interests of the beneficiaries.
  3. Beneficiaries: These are individuals or entities that stand to benefit from the trust. The trust deed will outline the rights and entitlements of the beneficiaries. It can be a fixed list of individuals or a class of persons, such as family members or charitable organizations.
  4. Assets: The founder transfers assets into the trust, effectively removing them from personal ownership. These assets can include property, investments, cash, or any other form of property.
  5. Administration: The trustee is responsible for managing the trust assets, investing them wisely, and distributing income or capital to the beneficiaries according to the terms of the trust deed.
  6. Duration: Trusts can be either inter vivos (created during the founder’s lifetime) or testamentary (created through a will and activated upon the founder’s death). They can also be discretionary, where the trustee has discretion in making distributions, or fixed, where the benefits are predetermined.
  7. Registration: The Master of the High Court is involved in the registration of a Trust, and certain information is submitted for record-keeping purposes.
  8. Taxation: Trusts in South Africa are subject to taxation. The Income Tax Act provides specific rules for the taxation of trusts, and it’s essential to comply with these regulations.

It’s crucial to seek professional legal and financial advice when setting up a trust in South Africa to ensure compliance with the relevant laws and to achieve the intended goals of the trust arrangement. Laws and regulations may evolve, so staying informed about any changes is essential.

Related Post

Top tips and tricks from a Senior Family Law Advocate on claiming maintenance for a five-year-old child in Johannesburg.

Child Maintenance is the right of the child, and not that of the parent. It is also not a privilege granted to parents who must pay it. It is their duty to pay child maintenance and support their children. Once the child is self-supporting (being able to care for him or herself), the obligation falls away. This can happen when the child is 18, 20, or even 30. It all depends on the circumstances of the case.

Claiming child maintenance for your child in Johannesburg

Whether you claim child maintenance in Johannesburg, or any other city in South Africa, the procedures would be the same. There are however two (2) courts that can deal with child maintenance matters. That is a divorce court, in a divorce matter, and a Child Maintenance Court. For this article, we will focus on claiming maintenance in a Maintenance Court matter in Johannesburg.

The maintenance scenario – Johannesburg South Africa

In this article, we will deal with the following fictitious scenario, in a child maintenance matter:

  1. The Child is seven years old and attends school in Johannesburg
  2. The child is cared for by the mother who works in Johannesburg
  3. The mother works and earns a Salary of R 10 000
  4. The father sees the child every second weekend. He also lives and works in Johannesburg
  5. The child’s monthly expenses are R 6000 – 00 which includes food, clothing, accommodation, education, travel etc.
  6. The father earns a reasonable salary and can afford the R 20 000 – 00 per month
  7. The mother claims R 4 000 – 00 maintenance as the father earns double her salary

What is the first step the mother must take in claiming child maintenance?

The first thing the mother must do is work out exactly what the child costs by item. She breaks down the minor child’s living expenses, starting from rent or accommodation to groceries to school fees etc. Once she has done that, she would need to determine what exactly does the minor child cost per month, seeing that she will be asking the father to contribute towards that. As best as possible, she needs to collect proof of expenses. This can be in the form of receipts.

How does she start the legal process?

The mother now needs to approach the maintenance court in the area where she lives or works to lodge a complaint for child maintenance. If she lives or works in Johannesburg, it would be the maintenance court in Johannesburg. She will complete a Form A wherein she will provide all the expenses for her and the minor child. She would also have to stipulate her income. Once she completed the form and submitted it to the maintenance court, she must then follow the next step.

What do you do while waiting for the maintenance court date?

While you wait to be informed of the court date by the Maintenance Court of Johannesburg, and up until the actual first court date, you need to ensure that you keep a record of all income and expenses for you and the child. This is very important as the court allocates maintenance based on recent income and expenses.

What happens at the first court appearance at the Johannesburg Maintenance Court?

Once you have been notified of the maintenance court date by the Johannesburg Maintenance Court, you need to ensure that you attend it. On that day, both you and the father of the child would appear before a maintenance officer. The maintenance officer would go through both your income and expenses as well as that of the father. If all the relevant information is not before the maintenance court, then the matter may be postponed in order for the parties to submit it.

The maintenance officer will try to settle the matter and have the parents come to an agreement regarding the amount of child maintenance to be paid. If they cannot come to an agreement regarding the child maintenance to be paid, the matter would have to proceed to a formal hearing or trial before a Magistrate.

How does the Maintenance Court hearing or trial work in Johannesburg?

Essentially, the maintenance court is called upon to make a fair ruling regarding what is a fair amount of child support that needs to be paid. For that to happen, the parents would have to give evidence in that regard. The mother would present to the court what the child costs, what she contributes and what she requires the other parent to pay. The Father would have a right to question the mother and to present evidence as to why he cannot afford the amount requested or why he feels it is an unfair amount. The mother can they also question him.

At the end of the day, the Johannesburg Maintenance Court would be able to properly determine what is a fair and adequate amount of child maintenance to pay after being presented will all relevant information. The Johannesburg Maintenance Court should play an active role in determining what is a fair amount of child maintenance the father should pay.

The above child maintenance application principles should apply to the following provinces and cities:

Eastern Cape:

Alice, Butterworth, East London, Graaff-Reinet, Grahamstown, King William’s Town, Mthatha

Port Elizabeth, Queenstown, Uitenhage, Zwelitsha

Free State:

Bethlehem. Bloemfontein, Jagersfontein, Kroonstad, Odendaalsrus, Parys, Phuthaditjhaba, Sasolburg, Virginia, Welkom

Gauteng:

Benoni, Boksburg, Brakpan, Carletonville, Germiston, Johannesburg, Krugersdorp, Pretoria, Randburg, Randfontein, Roodepoort, Soweto, Springs, Vanderbijlpark, Vereeniging

KwaZulu-Natal:

Durban, Empangeni, Ladysmith, Newcastle, Pietermaritzburg, Pinetown, Ulundi, Umlazi

Limpopo:

Giyani, Lebowakgomo, Musina, Phalaborwa, Polokwane, Seshego, Sibasa, Thabazimbi

Mpumalanga:

Emalahleni, Nelspruit, Secunda, North West, Klerksdorp, Mahikeng, Mmabatho, Potchefstroom, Rustenburg, Northern Cape, Kimberley, Kuruman, Port Nolloth

Western Cape:

Bellville, Johannesburg, Constantia, George, Hopefield, Oudtshoorn, Paarl, Simon’s Town, Stellenbosch, Swellendam, Worcester

 

 

 

Posted on by Telelaw