Generic selectors
Exact matches only
Search in title
Search in content
Post Type Selectors
Search Products
Filter by Categories
Company Secretarial
General Business
General Interest
Investing in Property
Personal Growth
Personal Wealth
Trusts and Estate Planning

Most people who come to see me about forming a trust want either just their children or perhaps themselves and their children as the beneficiaries. Is this a good idea? No, and here’s why you shouldn’t do it –

If a trust has no beneficiaries, then its assets are forfeited to the State and that means that if you, your spouse and children all die in the same accident (which, unfortunately, is not beyond the bounds of possibility), then JZ and his cronies get another windfall.

So what should you do?

The first thing to appreciate is that, provided your Trust Deed is properly drafted as a discretionary trust (and, except for certain special purpose trusts, it should be), the trustees have absolute discretion as to how they deal with the trust assets and income or, putting it another way, the beneficiaries have no claim whatsoever against the trust. In fact, they do not even have to know that they are beneficiaries.

The next thing is that you can name individuals, or an identifiable class of individuals as beneficiaries (you can also name another trust or a company). If you name individuals, then you will probably want to add to the list as time goes by and that requires that you register an amendment to the trust deed with the Master of the High Court, which can be a pain. Also, if you include named minor children, you have to provide the names and IDs of their guardians, which might also change in the future.

So, better to keep the named individuals to a minimum. We usually recommend that we name you and your spouse and the relations of each of you within the first degree of consanguinity and the descendents of any beneficiary. Your relations within the first degree of consanguinity are your parents, siblings and children (i.e. one step in each direction on the family tree, up, sideways and down). The second degree would include grandparents, cousins and grandchildren (two steps in any direction). Note that since we include the descendents of any beneficiary, nieces, nephews and grandchildren are included in our definition.


XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Need help with your Trust or Business?

Contact us today or set up a free meeting with our CEO, Derek Springett. We have been offering expert advice and business services since 1971. You can also view see our full list of services.

If you enjoyed this article, you may like to subscribe to the monthly round up featuring all of my latest articles. Then check out the three books I have written which have proved to be very popular.

Complete the form below to subscribe to my monthly round up.

Do you want to leave your cart?

Your cart is awaiting your next purchase, so please proceed to the Home page and continue shopping. If you are leaving your cart because of problems, why not give us a call on our 24 hr numbers 063 866 8928 or 011 805 0030 (subject to load shedding)? If all else fails, call Derek, our CEO on 082 552 9696. We’ll do what we can to help