Monthly Archives: May 2014

Trusts and Life Insurance

Trusts and Life Insurance

How Irrevocable Life Insurance Trusts can be used to avoid Estate Duty.

Did you know that your Life Insurance Policy forms part of your Estate and is thus liable for Estate Duty deductions when you die? This means that not only do beneficiaries to your Estate have to feel the brunt of Tax on their inheritance, but also those who are beneficiaries to your Life Insurance Policies.

There is a way around this however:

  • Safeguard your Life Insurance Policy from Estate Tax
  • You can set up an Irrevocable Life Insurance Trust
  • Irrevocable Life Insurance Trusts are the beneficiaries to Life Insurance Policies
  • You can name beneficiaries to your Irrevocable Life Insurance Trust

Trusts and Estate Tax

Your Trust belongs to no-one; it is its own separate entity into which you will place your assets, and name beneficiaries to receive those assets. Thus your Trusts do not form part of your Estate, which means that they are not liable for Estate Duty.

Trusts for Life Insurance Policies

Setting up an Irrevocable Life Insurance Trust allows you to name the Trust as beneficiary to your life insurance policy, protecting it from Estate Duty. There is always a downside of course: Trusts can be expensive to setup and maintain. Understanding the costs involved between paying Estate Duty and fees versus paying Trust fees is of paramount importance in this regard: consult your Fiduciary advisor today to decide which is best for you.

Irrevocable Life Insurance Trusts for your Beneficiaries

Your beneficiaries will typically include your spouse and thereafter your dependants, which means that your Trust will behave in a very similar manner to your actual policy. You can however dictate the terms of your Trust, getting it to perform exactly as you intend. To ensure no disputes occur between your policy and Trust requires sufficient knowledge of the legal framework behind each. Consult Crest Trust today for more information.


Estate Tax: Estate Duty and Abatement

Estate Tax: Estate Duty and Abatement

Learning what you’re liable to pay in Estate Tax. Over recent years the South African laws regarding Estate Tax have undergone a few changes, resulting in the need for updating Wills and Estate Planning. Keeping up to date with these changes can seriously help in this matter. Specifically, understanding how Estate Duty is calculated willContinue Reading

Filed Under: Tax

Examples of how Trusts can be used in your Estate

Examples of how Trusts can be used in your Estate

Trusts create the legal relationships between your assets and their beneficiaries. You can structure your Trusts in many ways in order to achieve the ends you want. A major benefit to owning Trusts is to safeguard your assets from creditors, allowing your family to live in peace following your death. Examples of how Trusts canContinue Reading

Common mistakes people make in their Estate Planning

Common mistakes people make in their Estate Planning

The ‘Don’ts’ of Estate Planning. Your Estate Planning can be a complicated and stressful endeavour if you don’t know what you’re doing. This leads to many people making mistakes when undergoing their Estate Planning, all of which can be avoided with the help of a fiduciary professional. Here’s a simple list of the top ‘don’ts’Continue Reading

Funding your Trusts

Funding your Trusts

How and why do you need to fund Trusts? The Trustmaker’s assets need to be retitled and transferred into the name of the Trust. Failing this, the Trustee cannot manage the Trustmaker’s assets. This means that probate will be ensue and your assets will be divided accordingly. Having undergone your Estate Planning process and draftingContinue Reading

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Crest Trust Services (PTY) Ltd. is an Authorized Financial Service Provider with FSB No: 28966