How to Open a Trust Account in South Africa

What’s a Trust Account?

It is a legal arrangement created by an individual for the management of assets for another person or group of people.

What is the importance of Trust Account?

1. It help in the distribution of an asset to the desired beneficiary in accordance to the trustee’s will.

2. It protects the asset of a beneficiary from being subjected to estate taxes.

What are the types of Trust Account?

1. Living Trust Account

2. Testamentary Trust Account

3. Revocable Trust Account

4. Irrevocable Trust Account

What are the types of Trust in South Africa?

There are 3 basic types of Trust

1. Ownership Trust

2. Bewind Trust

3. Curatorship Trust.

What is the difference between Trust Account and General Account?

Trust Account is managed by a trustee whiles a general account is managed by the owner.

Which bank can you open a Trust Account?

How can you open a trust account in South Africa?

1. Selection of type of Trust Account. Select the type of account that suits the beneficiary

2. Appointment of a Trustee. Mostly, banks and law firms serve as trustee but you can choose an competent individual to be your trustee

3. Determination of Assets. Make the decision of the kind of assets like bank account, estate property and cars that should be allotted to this trust account.

4. Drafting and Filing of Documents. The trust will be drafted in accordance to the state law and the papers signed b.

5. Bank Process. The trust documents are sent to the bank to set up the Trust Account.

How much does it cost to register a trust account?

The cost of setting up of a trust, drafting it and registering can amount to R7000 to R20 000.

How is the income of a Trust taxed?

Income of a Trust is taxed on either the trustee, beneficiary or on the trust.

Income taxed is levied on the trust using a flat rate of 45%.

What Assets Should Go Into a Trust?

1. Bank Accounts

2. Corporate Stocks

3. Bonds

4. Tangible Investment Assets

5. Partnership Assets

6. Real Estate

7. Life Insurance

Does a Will override a Trust?

A trust will override a will since it operates after its establishment immediately and will only takes effect at death.

What happens if a trustee resigns or dies?

Letters of Authority will be returned to the Master of the High Court for the name of the appointed trustee to be deleted

Who owns the property in a Trust Account?

The Trustee

Can I leave my house to my daughter in a Trust Account?

Your daughter can inherit your house, even if she is under 18 years.

Can a Trustee Also be a Trust beneficiary in South Africa?

A trustee can be a beneficiary in terms of the trust but not a sole beneficiary of the same trust as it violates the law of administration of the Trust to the benefit of another person.