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A Trust Is an Agreement Whereby

Property of any kind may be held in a trust. The use of trusts is diverse, both for personal and business reasons, and trusts can offer estate planning, asset protection and tax benefits. Living trusts can be created during a person`s lifetime (by drafting a trust deed) or after their death in a will. In South Africa, minor children cannot inherit assets and, in the absence of a trust and assets held in a government institution, the Guardians` Fund, and passed on to children in adulthood. As a result, testamentary trusts (willsies) often leave assets in a trust for the benefit of these minor children. In addition, trusts are often used to manage property, assets or estates held for a minor or a person who is unable to be financially responsible until that person is able to manage the assets on their own. All trusts must contain at least the following: In addition, entities such as corporations, LLCs, and other trusts may fulfill any or all of these roles. For example, it is quite common for banks to act as trustees. Many banks have even incorporated the name “trust company” into their name because an essential part of their business is to serve as trustees (for a fee, of course). The law contains specific confidentiality obligations to the trustee, protector, executor or any other person to keep the trust`s information and details confidential. This right is waived in cases where the law requires the disclosure of such information or where a judge before whom a case is heard renders a corresponding judgment. However, given the changing times, disclosure of trusts in Cyprus is required. [37] Such disclosures are required: the trustee is the rightful owner of the trust assets as a trustee for the beneficiary or beneficiaries who are the equitable owner of the trust assets.

Trustees therefore have a fiduciary duty to administer the trust for the benefit of the equitable owners. You should provide for regular accounting of escrow income and expenses. Trustees may be compensated and their expenses reimbursed. A court of competent jurisdiction may dismiss a trustee who fails in his or her fiduciary duty. Certain violations of the duty of fidelity may be charged and tried in court as criminal offences. In many ways, trusts in South Africa operate in the same way as other common law countries, although South African law is actually a mixture of the British common law system and Romano-Dutch law. Trustee: The Trustee is responsible for the administration of the trust for which the Trustee has appointed him. They are the person responsible for managing the property or assets that the trust gives them for custody and are titled in the agreement.

An owner who places property in trust transfers part of his or her set of rights to the trustee and separates legal ownership and control of the property from his or her equitable ownership and benefits. This can be done for tax reasons or to control the property and its benefits if the grantor is absent, unable to work or deceased. Testamentary trusts can be created in wills that define how money and property are treated for children or other beneficiaries. In general, an explicit private trust requires that three elements be secured, collectively referred to as the “three certainties.” These elements were defined in Knight v Knight as an intention, an object and an object. [15] Certainty of intent allows the court to determine the true reason why a trustee establishes the trust. The certainty of purpose and elements allows the court to manage the trust if the trustees do not. [16] The Court assesses whether there is sufficient certainty in interpreting the words used in the fiduciary act. These words, in their “reasonable sense”[17], are interpreted objectively in the context of the instrument as a whole. [15] While intent is an integral part of the expression of trusts, the court will try not to let trusts fail for lack of security. [18] A testamentary trust, often referred to as a testamentary trust, is an agreement made in favour of a beneficiary once the trustee has died and determines how the assets are to be endowed after the trustee`s death. This type of trust is often set up by an executor who manages the trust for the trustee`s deceased after their will and will have been drafted.

And a testamentary trust is irrevocable (cannot be changed or altered). There are strong restrictions on a trustee in a conflict of interest. Courts can set aside a trustee`s actions, order the return of profits, and impose other penalties if they determine that a trustee has not performed any of his or her duties. Such a breach is called a breach of trust and can place serious liability on a negligent or dishonest fiduciary for its failure. Settlors and trustees are strongly advised to consult with qualified legal counsel before entering into a trust agreement. .