There is a misconception that a trust is only for wealthy individuals and one needs a lot of money to set it up. The reality is that any person can open a trust if they have some form of an asset that they feel need to be safeguarded for the benefit of their beneficiaries.
Matlhodi Leteane, Head of Operations at FNB Fiduciary says “when one considers setting up a trust, they first need to answer two key questions; why and for who. Why represents the reason you are setting up a trust while who represents for whose benefits?
Trusts are used as an effective estate planning tool to safeguard the assets on behalf of your beneficiaries. For example, debts that belong to the person who opened a trust are separated from the assets that are in a trust because a trust is a stand-alone vehicle.
“Consumers must not lose track of the reasons they opened a trust but look at the long-term benefits that a trust will afford their beneficiaries,” says Leteane.
Leteane outlines what a trust can allow individuals in order to safeguard their assets for the benefit of their beneficiaries:
Creating a trust to look after the interest of your minor children could be as easy as drafting your will and including a provision for a Testamentary Trust. However, one need to ensure that your trust structure suits your unique personal needs.
“It is advisable to enlist the service of professionals who are informed about the legislation in relation to trusts so that they can guide you. This will ensure that the trust is managed according to legislation and best practices,” concludes Leteane.
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