Trusts can also be used for estate planning. As a general rule, the assets of a deceased person are transferred to the spouse and then distributed equitably among the surviving children. However, children under the age of 18 must have administrators. Administrators only have control over the fortune until the children`s adulthood. The next party that enters the picture is the proxy. This person will take care of and manage trust in the future. Directors are appointed by the donor to maintain the trust`s assets. Trustees are often compensated for their time and services provided by the trust`s funds. Until recently, there were tax benefits for living trusts in South Africa, although most of these benefits have been eliminated.
Protecting assets from creditors is a modern advantage. With notable exceptions, the trust`s assets are not held by the directors or beneficiaries, the creditors of the trustees or beneficiaries may not be entitled to the trust. Under the Insolvency Act (Law 24 of 1936), assets transferred to a living trust remain threatened by external creditors for 6 months if the debtor owner is solvent at the time of the transfer, or 24 months if they are insolvent at the time of transfer. After 24 months, creditors are not entitled to assets in the trust, although they may attempt to add the credit account, forcing the trust to sell its assets. Assets can be transferred to the living trust by selling them to the Trust (through a loan to the Trust) or by giving money (each individual can give R1000 R1000 per year without collecting tax on donations; 20% of the tax on donations apply to additional donations in the same tax year). Living trusts can be revocable or irrevocable. Will trusts cannot be irrevocable. Irrevocable trust is generally more desirable.
The fact that it is immutable and contains assets that have been permanently removed from the trust holder`s property minimizes or avoids inheritance tax. Regulation of the sector that provides business management and fiduciary management (ASP) functions has also led to the disclosure to the regulator of the existence of a Cyprus International Trust. This obligation is on the fiduciary company and the information disclosed is as follows: the agent generally has full control of an irrevocable trust that is subject only to the trust contract and its corporate law obligations. An early possible concept, which later became what is now considered a land trust.