Property, Business Trusts, etc

[DK@MyBroadband]

With becoming a business owner I have been told that I should move my Assets like my home into a trust. Apart from it being an asset protection strategy what are the other benefits?

Furthermore, I believe that there are several trusts for one to put in place, Property, Business, etc. Does one need to open a trust for each?

 

[gimpex]

Normally one trust covers it all. The trust can own various companies , like your business etc , and / or own assets like your house , cars etc. But make sure you really understand what you are doing , who the trustees are etc. You are effectively relinquishing control / ownership of your assets to a group of people ( trustees ). Trustees need to be seen to be independent otherwise your asset protection might now work if the poo hits the fan. Same for tax avoidance ( note I didn't say evasion ).

 

[chicken247]

Normally one trust covers it all. The trust can own various companies , like your business etc , and / or own assets like your house , cars etc. But make sure you really understand what you are doing , who the trustees are etc. You are effectively relinquishing control / ownership of your assets to a group of people ( trustees ). Trustees need to be seen to be independent otherwise your asset protection might now work if the poo hits the fan. Same for tax avoidance ( note I didn't say evasion ).

"possession is eleven points in the law, and they say there are but twelve." I have discovered that i am not the kinda person who can give up control anymore. There is an opportunity in every situation to exploit. If it's all gonna go up in flames , so be it, at least i shall be the oke toasting the last marshmellow and eatingf it.. Be very sure this is what you want to do.

 

[The_Ogre]

My idea of a trust is to create wealth and hold on to it for generations. There are of course other reasons (testamentary trusts , etc)

This is my plan. Eventually I want to move my primary residence, investments and businesses into the trust. I'll then make my wife and two kids trustees so that when I die there's no issue about transfers, attorney's etc. Also that which I've worked for stays within my family and they can then expand and use this is a sort of value proposition.

I still need to do a bit more research about it though.

 

[gimpex]

You should check that before proceeding. I think if all trustees are "under your control " then effectively you own/control the assets and not the trust therefore it could have negative tax consequences which you are trying to avoid in the first place. That's why these trust firms offer their trustee services. So one is independent and working according to the guidelines given to the trust.

 

[The_Ogre]

You should check that before proceeding. I think if all trustees are "under your control " then effectively you own/control the assets and not the trust therefore it could have negative tax consequences which you are trying to avoid in the first place. That's why these trust firms offer their trustee services. So one is independent and working according to the guidelines given to the trust.

I very much doubt that any one person controls a trust, well unless you're the only member.

From this site, all trustees jointly control the trust:

A trust is an agreement between an owner of assets and trustees. In terms of this agreement, the trustees undertake that they will administer the trust's assets with the necessary care to the benefit of the beneficiaries. It is an efficient and flexible way to ensure that assets are looked after. It also ensures that assets are objectively managed and controlled by appointed trustees in the best interests of the beneficiaries.

The protection of your loved ones' financial interests is extremely important in the planning of your estate. You want to be sure that your family, and especially minors, will be looked after, and that your estate and income tax obligations are kept as low as possible, so that your heirs can enjoy the full benefit of your estate.

 

[gimpex]

What I am saying is that if the trustees and beneficiaries are either the dang or related you could get conflict of interests. There have been cases where courts can then over rule the trust structure.

 

[The_Ogre]

What I am saying is that if the trustees and beneficiaries are either the dang or related you could get conflict of interests. There have been cases where courts can then over rule the trust structure.

Aah, ok. Thanks!

 

[DK@MyBroadband]

Thank you for the information. Certainly a lot to think about.

 

[IziWhatNow]

You do not want one trust for all your assets and business interests. One of the benefits of having a trust, is deferred liability.

I suggest a family trust - where you put your personal home and assets that are fully paid (cars, house content, etc.). This trust's purpose is to provide for your family, even when you pass away. The advantages are that there is no assets in your personal estate when you die (less tax implications, no assets or bank accounts will be frozen, your family can continue with their lives).

Then you need at least one more trust, in which you do your business and investments. By having a separate trust here, you mitigate the risk of losing your house & car or personal assets if business went sour.

Note that moving property, such as your personal home, into a trust carries the same conveyancing fees as if buying a new property.

Each trust needs at least one independent trustee. This is someone who does not benefit from the trust, who will ensure the trust continues running when the main trustees pass away and will facilitate the process of appointing new trustees (i.e. your kids).

I suggest you talk to an expert about the legalities, fees, tax implications and how your cash flow will work between your natural person and entities.

Hope this makes helps

 

[Former member 61586]

Why the hell would you have a company/strangers as trustees of your trust? That is as dumb as making a bank the executor of your estate.

 

[IziWhatNow]

Why the hell would you have a company/strangers as trustees of your trust? That is as dumb as making a bank the executor of your estate.

Who the hell said you should make a company or strangers trustees of your trust?

 

[Former member 61586]

Who the hell said you should make a company or strangers trustees of your trust?

was implied here

Normally one trust covers it all. The trust can own various companies , like your business etc , and / or own assets like your house , cars etc. But make sure you really understand what you are doing , who the trustees are etc. You are effectively relinquishing control / ownership of your assets to a group of people ( trustees ). Trustees need to be seen to be independent otherwise your asset protection might now work if the poo hits the fan. Same for tax avoidance ( note I didn't say evasion ).

 

[gimpex]

Read the first paragraph here ( this is the first one that came up , there are others )

http://www.fanews.co.za/article/lif...he-independent-trustee-why-the-big-fuss/16905

You can also search for cases where the trust was registered but later the trust independence was set aside because it was deemed to be controlled by the donor.