25 Mar

An inter vivos trust is a type of trust that is established by a person during their lifetime to manage specific assets or investments and provide support to beneficiaries, typically family members. The primary purpose of this type of trust is usually to generate income for the beneficiaries and to provide funding for various needs such as housing, care, education, and general welfare. 

Additionally, inter vivos trusts can be utilized to transfer assets to capital beneficiaries both during the lifetime of the trust and upon its termination.To create an inter vivos trust, the founder enters into an arrangement with the trustees, and the trust is formed upon signing and registering a trust deed. 

Once the trust deed is signed by all relevant parties, it is registered with the Master of the High Court in the jurisdiction where the majority of the assets are located or where administration is to take place. The trust deed specifies the initial donation required to bring the trust into effect, which may be in the form of cash or certain assets. 

It is crucial to make this donation promptly after creating the trust, as it is often overlooked. Inter vivos trusts can be structured as either vested or discretionary trusts. These trusts are an excellent way to protect assets from generation to generation and limit estate duty by keeping growth assets, such as shares, properties, and alternative investments, out of one's estate.

Author: Louwrens Koen 

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