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ADDED LEGAL VALUE
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ebattorney@yebo.co.za
www.barnards.co.za
Barnard
Labuschagne Inc. t/a
Ettienne Barnard Attorneys
Tel. +27 21
852 7780
Fax +27 21
852 4194
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July 17, 2008 |
Volume 1, Number 7 |
A prudent person
sees trouble coming and ducks; a simpleton walks in blindly and is clobbered
Proverbs 27:12
The Message |
We can register a family trust for you
R1468. Go ahead protect those assets.
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More on estate planning
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In our
last issue we explained how to protect company assets from personal debt by placing the
shares of the company in a trust.
But what about the debt of
the business? Place the assets of the business
in a separate trust and try to avoid signing as personal surety for the debts of the
business. The effect will be that your
personal assets are safe in one trust and your business assets are safe in another. |
What is a trust?It
is something you should have. Peter
Carruthers, author of Crash
Proof Your Business
says lawyers make things too complicated. Everyone
should be told to have a trust. He speaks as someone who on a personal level can
appreciate the unexpected problems one faces when your assets are not properly protected
by the use of trusts.
A
trust is a structure where someone takes care of another person’s assets. The law then protects the assets against creditors
of the caretaker. If Mrs A wants to safeguard
her belongings, she can create the Mrs A Family Trust by donating assets to the caretaker
(called a trustee) to look after them on her and her family’s behalf.
There
can also be more than one caretaker. So a
typical structure would be that Mrs A is the creator and Mrs
A, her husband and an independent person (such as the family accountant or attorney) are
the trustees while Mrs A, her husband and their children are the beneficiaries (the
persons on whose behalf the assets are protected.)
Why is it good protection?Risk
is something you don’t always realize you have. If
Mrs A runs into any financial trouble, “her” assets should be safe because they
are no longer in her personal estate. They now
belong to the trustees.
If
the trustees run into personal financial problems, the trust assets are safe as the
trustees do not own them personally. They own
them only in their capacity as trustees.
If
the trust beneficiaries run into financial trouble, the assets are safe as they do not own
any of the assets. (They only have a right to receive benefits from the trust.)
Greetings.
Barnard
Labuschagne Inc Registration No. 1999/015298/21 t/a  |
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Disclaimer
Added Legal Value is provided for general
information and networking purposes. Its
publishers accept no liability for damages, errors or omissions. For professional advice or to properly protect your
rights, please consult a qualified legal practitioner.
Copyright
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willing recipients. It, its name, concept or
content may not otherwise be used, reproduced, redistributed, copied or imitated.
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