The idea of a trust is often understood in popular imagination as something reserved for the super-wealthy. However, a trust has many benefits for people from many walks of life, especially those looking to protect their assets. It can help property owners ensure that their assets are efficiently transferred through generations and much more.
In the simplest possible language, a trust is a 'legal person' (but not an actual person). That means a trust may be the registered owner of the property as indicated on a title deed. Furthermore, a trust is a 'legal person' who cannot die. As such, it is an effective vehicle for transferring ownership to one's heirs. Additionally, a trust can be a conduit for income generation and distribution of funds to beneficiaries. Importantly, a trustee must be nominated to administer the assets of the trust for the benefit of those stipulated as beneficiaries.
In terms of the Trust Property Control Act, 57 of 1998, a "trust" is defined as:
"[...] the arrangement through which the ownership in property of one person is by virtue of a trust instrument made over or bequeathed-
(a) to another person, the trustee, in whole or in part, to be administered or disposed of according to the provisions of the trust instrument for the benefit of the person or class of persons designated in the trust instrument; or
(b) to the beneficiaries designated in the trust instrument, which property is placed under the control of another person, the trustee, to be administered or disposed of according to the provisions of the trust instrument for the benefit of the person or class of persons designated in the trust instrument or for the achievement of the object stated in the trust instrument,
but does not include the case where the property of another is to be administered by any person as executor, tutor or curator in terms of the provisions of the Administration of Estates Act, 1965 (Act No. 66 of 1965)".
The answer to this question will depend on multiple factors. What objective are you trying to achieve with your property investments? Are you looking to leave a legacy for your children and grandchildren to enjoy? How many beneficiaries are you looking to nominate? How many assets do you have in your property portfolio? Will the benefits outweigh the cost transfer duties? The answers to these questions will be different for each individual... However, if you need some advice on where to start, get in touch with our licensed property professionals today.