Some of the benefits of a family trust are detailed below:
Property belonging to a Family Trust is protected from creditors – the assets of the trust cannot be attached to satisfy individual debts of the Founder, Trustees and or beneficiaries. Even in the event that the Founder has passed on creditors cannot claim a property registered in a Family Trust.
There is protection of family property as it is managed by Trustees on behalf of the beneficiaries or children. No child can sell or destroy property belonging to the Trust (unless there are provisions in the Trust permitting such) – it is important to note that with family trusts there is no blanket approach as each Trust is tailor made to suit the client’s needs.
A Family Trust also prevents abuse of property and funds as it is managed by Trustees for the benefit of the beneficiaries.
A Trust, is considered by the law as a separate legal entity. This means that even where there is a legal dispute be it contractual, criminal or matrimonial against the Founder or Trustees, the property in the name of the Family Trust cannot be regarded as belonging to the Founder or Trustees. They are treated separately except in exceptional cases provide for by the law.
A trust has perpetual succession. This means that a Trust does not die (whilst we do). Upon the death, demise or incapacitation of the Founder or Trustees the Trust is not liquidated but continues to operate until dissolved by the Trustees of the time being in accordance with the provisions of the Trust Deed.
There are tax benefits. A Trust enjoys some tax exemptions for example when the Founder passes on, property registered in the Trust is not distributed under the Deceased Estates Succession Act where the government calculates taxes against the total value of the Estate. The property survives as if nothing happened.
A Family Trust also prevents inheritance wrangles and disputes between parent, children and relatives. The property registered in a Trust is not subject to distribution upon death of the Founders. The property remains as if nothing happened.
A Trust enjoys contractual rights. This means that a Trust can enter into valid contracts with individual or entities in its name on its own.
With the advantages listed above why haven’t you set up your family trust?
This is for general information purposes only