into existence. If you are both Founder and Trustee, ensure that you comply with this requirement in your capacity as Founder and record the disposal of such income or asset in the name of the Trust by retaining proof of the Founding Settlement and having same recorded in the financial statements of the Trust. The Founding Settlement amount varies from trust to trust, but usually constitutes the donation of an initial cash payment or assets to the same value. This information can be found in the Trust Deed itself.
3Asset register: A further requirement of the TPCA is that Trust property be recorded in the best possible manner to identify it as such. Immovable property belonging to a Trust must therefore be registered in the name of the Trust in the relevant Deeds Office. If you do not complete this process, the property will remain vested in your personal name, form part of your estate and be taken into account for estate duty, capital gains and executor’ s fees purposes on your death. Or it could attachable by creditors should you be faced with claims during your lifetime you are unable to settle. To establish what the process and what the associated costs will be of transferring immovable property to a Trust, please contact your Trust Attorney for further assistance.
Shares in private and listed companies should be issued in the name of the Trust and vehicles registered in the name of the Trust at the Licensing Authorities. Movable assets should be listed in an inventory or asset register and be described with sufficient detail to identify the particular movable asset, by including, for example, serial numbers etc. Life policies are to be recorded with the relevant assurer as being owned by the Trust. Your financial advisor will be able to assist you with the relevant forms to give effect to this requirement.
Any other assets such as investments should similarly be recorded in the name of the Trust.
4 Accounting:
Common to all the above asset classes is that they must be recorded in the Trust’ s books of account. If you have neglected to provide the Trust Accountant with the information to record Trust Assets, make a note to arrange a meeting as soon as possible and remember the potential tax planning benefits that may be gained if this administrative task is promptly and diligently dealt with. The registration of the Trust as an income tax payer is also a task required of the Trustees and one which the Trust Accountant will assist you with if this has not yet been attended to.
5 Resolutions
A key element of proper Trust governance required by our Courts is that the separation of ownership and enjoyment must be seen to be observed, particularly where Trustees are also beneficiaries of the same Trust. This is achieved by ensuring that decisions relating to trust transactions are considered by all Trustees and approved by majority where there are more than two trustees. When transacting on behalf of the trust, remember to notify all other Trustees of the transaction and obtain the necessary resolution reflecting the decisions of the Trustees. Should you have been remiss in this regard, or should circumstances exist which would have made it difficult or impossible to obtain a prior written resolution of the Trustees, the law does allow for ratification of such transactions. If this has been the case, notify your Trustees now and ensure that the relevant resolutions are passed. 6Record
keeping: The TPCA provides that documents which serve as proof of the investment, safe custody, control, administration, alienation or distribution of trust property must be retained by Trustees for a period of five years reckoned from the termination of a Trust, unless written consent to do otherwise is obtained from the Master. Fortunately document storage facilities have become easily accessible thanks to Dropbox and other cloud storage facilities like it. The important thing is to ensure that all documents are saved and backed up.
7Trustees’ meetings: Lastly, Trust Deeds usually regulate how, when and if Trustees should meet. These provisions also need to be observed. Again, with the advent of cyberspace and improvements in technology and their recognition in our law, these meetings may be held electronically, by round robin resolution or by teleconferencing. A good way of ensuring that you do not overlook this requirement is to enter an annual reminder on your cell phone to contact your fellow Trustees to discuss and implement trust matters.
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www. reimag. co. za FEBRUARY 2017 SA Real Estate Investor 57