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Estate Planning and Trusts Law

  • Estate Planning and Trusts Law

      • Estate planning is the process of arranging and managing your estate during your lifetime. Upon your death, your estate will be transferred in
        accordance with your wishes.

        The ‘estate’ comprises of the assets and liabilities that the estate planner has acquired during his/her lifetime, and which will be left behind at
        his/her death.

        Estate planning should take into account the estate planner’s financial, economic, social and psychological needs in relation to his/her estate,
        the family and the beneficiaries.

        A few functions of estate planning:

        • To ensure that the winding up of the estate takes place efficiently;

        • To appoint heirs and legatees of choice and distribute assets according to the estate planner’s wishes;

        • To provide liquidity which ensures that there are sufficient cash funds available in the estate to pay estate duty, settle liabilities and administration costs;

        • To provide for dependants and protect children’s beneficiaries;

        • To provide for an estate planner’s own set of circumstances;

        • To decide whether to execute a living will;

        • To minimise costs.

        Trusts as a financial and estate planning tool:

        A trust is an arrangement that allows someone (a trustee) to hold assets, without owning them, for the benefit of the trust beneficiaries.

        The use of a trust offers dual functionality by protecting assets as well as creating certain taxation benefits:

        • Setting up a trust for a mentally disabled or incapacitated person allows for safe custody of the assets and at the same time
        benefitting from lenient tax treatment in terms of income tax and capital gains tax.

        • Setting up a testamentary trust for the benefit of minor children provides some income tax benefits, and prevents any funds from
        being held by the Guardian’s fund on the minor’s behalf.

        • A discretionary trust (gives trustee discretionary powers as to how and when to allocate income or capital of the trust to the
        beneficiaries) may enjoy creditor protection in the case of an estate planner or beneficiary’s insolvency.

        • Where an asset was transferred to the trust while the estate planner was solvent, a creditor would have difficulty setting
        the trust transaction.

        • Protection is afforded to those assets where the insolvent has no vested rights (the benefits vest in the beneficiaries but are
        administered by the trustees).

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        Hi, I’m Kailash Pillay, an attorney from the city of Johannesburg. My passion for the law
        stems from a desire to improve upon the lives of the vulnerable who fall prey to a
        corrupt system.
        I studied at the University of Johannesburg where I obtained my Bachelor of Laws
        degree, the starting point to the long journey of becoming a legal practitioner.
        This profession has taught me to persevere through the complexities of the law and to
        continually develop my skills as a legal professional.