Category Archives: CAREER

MY ROLE AS A TRUST SPECIALIST

As some of you may already be aware, I am a Trust Specialist for a financial services company, in Cape Town.

I have operated in this capacity since April 2017, however I have been in Trusts since October 2011. I have grown in leaps and bounds, and have ensured that I remain abreast of changes within the industry.

So, what exactly does a Trust Specialist do?

When the above question is posed, my response is “I give my clients peace of mind”.  That is essentially what we do.

We are in the business of wealth creation and preservation. We encourage and assist our clients adequately prepare for the future.

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My role as a Trust Specialist entails the management of a portfolio of trusts, each very unique and with unique circumstances. I guess this is what keeps everything so interesting. I also enjoy the relationship management side of my role.

Our roles are multi-faceted in that we deal with aspects of the Law, Investment Planning, Tax as well as Finance. Legislation changes over time and we constantly have stay up to date with these changes so that:

1. We maintain relevance, and

2. Adequately service our clients.

Many steps are required to safeguard effective administration of a Trust. I therefore recommended that you engage the services of a reputable organisation to assist facilitate the process for you.

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WHAT IS A TRUST?

A Trust is a legal entity with its own distinct identity. It may acquire and hold property, shares and other such assets in the interests, and for the benefit, of its beneficiaries, the people for whom the trust was created.

A Trust has its own contractual capacity and it may acquire and sell property, it may acquire shares in a company, or acquire and dispose of any other assets.

Trusts are administered in terms of the Trust Property Control Act, and formed and governed in terms of a written agreement between Trustees and the Founder, known as the ‘Trust Deed’.

BENEFITS OF A TRUST

If you have minor children, I would really urge you to make provision for a trust in your Will, and to nominate guardians for your minor children.

It is important to note that there are some drawbacks to creating a Trust; which makes this vehicle not necessarily suitable for everyone. My recommendation would be that you consult a specialist with sufficient knowledge and experience in the matter to assist you to decide whether you are a candidate to create a trust.

Below are some benefits of a trust. The list is not exhaustive; therefore if you’d like more information; please contact your financial advisor or personal banker – who will point you in the right direction.

Flexibility

A discretionary trust is extremely flexible, and can be administered to take into account changes over time in family, financial and legislative circumstances.

This means the trustees can manage the trust’s assets in the best interest of the beneficiaries at any particular time by taking into account all relevant factors. This flexibility caters for such uncertainties as divorce, insolvency, increase in family size or fortunes, and of course annual changes to tax legislation.

Tax planning

If created and operated with care and with appropriate advice from tax experts, a trust can be administered so as to mitigate taxes such as estate duty, income tax, capital gains tax, donations tax and transfer duty (depending on the relationship between the settlor – the person who establishes a trust and transfers assets into it – and the beneficiaries) for both the settlor and the beneficiaries.

Also, the assets owned by the trust will not be subject to estate duty, capital gains and executor’s fees on the death of the settlor.

Estate and succession planning

Trusts provide for the creation of flexible succession arrangements.

Also, the assets owned by the trust will not be subject to cumbersome and often lengthy legal procedures after your death, as is the case with the administration of assets in your personal estate. Trust assets are accessible at all times, while assets in your personal estate are frozen during the estate administration process.

Family asset management

A trust can provide a centralised asset management structure and controlled distributions for beneficiaries who are not in a position to manage assets themselves. This may be due to minority, disability or prodigality. A trust can provide for joint ownership of indivisible assets like holiday homes and farms.

Protection of assets

In the event of insolvency, disability or divorce, a Trust can help a family protect assets from potential creditors.

Choosing the right trustees:

By choosing your trustees wisely, you can ensure professional asset and investment management and that your assets are taken care of when you are not around or able to look after them yourself.

To note:

1. When setting up a Trust, you divest yourself from the trust assets. In other words, you part ways with  the assets as they no longer belong to you. The founder/creator of the trust will lose control of the underlying assets. To set up a valid trust, a settlor must intend to and actually transfer legal ownership of the trust assets to the trustees.

This means that the trustees then must administer and control the trust assets.

2. Establishing a trust generates additional administrative costs. Enquire upfront on the fees associated with setting up of this vehicle and ensure that you understand the monthly costs associated with the administration thereof.

In summary, trusts are not appropriate for everyone. However, if set up and administered properly, they still provide real and substantial advantages which could benefit you and your family.

Trust management can be technical, therefore make sure you obtain expert and independent advice before making the decision.

I trust the above has given some insight into what “a day in my work-life” looks like.

Until next time, love and light.

xx