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Thread: Trusts - benefit mentally challenged?

  1. #1
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    Trusts - benefit mentally challenged?

    I have a dormant trust with my youngest as beneficiary- as i have 4 children is it good to change the trust to have 4 beneficiaries?.
    i need to buy a flat/small house for the older as he is mentally challenged and want to let the other beneficiaries have the benefit of having the property after him, can i change the trust or need i have to make a new one that includes the 4 beneficiaries.
    What will the tax implications be in such a case as i will buy it with my own funds, and will it go (property) on to benefit the beneficiaries thereafter without any tax implication?
    I am a noob on trusts if someone can spell out the pro's and cons
    Thanks

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    Quote Originally Posted by Gene View Post
    I have a dormant trust with my youngest as beneficiary- as i have 4 children is it good to change the trust to have 4 beneficiaries?.
    i need to buy a flat/small house for the older as he is mentally challenged and want to let the other beneficiaries have the benefit of having the property after him, can i change the trust or need i have to make a new one that includes the 4 beneficiaries.
    What will the tax implications be in such a case as i will buy it with my own funds, and will it go (property) on to benefit the beneficiaries thereafter without any tax implication?
    I am a noob on trusts if someone can spell out the pro's and cons
    Thanks
    I am just a Sparky - I have a trust and created complications in my life . intended and unintended
    During Covid I realized that the way the Trust was set up and in conjunction with will's , life could become complicated if I passed on and so I sat with my attorney going through what I thought I wanted.

    He did some thinking and came back with solutions that would be , hopefully , bomb proof and end up the way I envisaged .
    Biggest problem when you are emotional involved with the situation is trying " to rule from the grave"

    My strong suggestion would be to talk to an Attorney who will structure what you intend and negate the tax complications along with all the other complications.

  3. Thanks given for this post:

    Gene (25-Dec-24)

  4. #3
    Diamond Member Justloadit's Avatar
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    There are many advantages in creating a Trust, but it requires you to understand what you are trying to achieve.
    There are also hidden costs associated with a Trust, and you need to be clear from the onset if it is a financial burden the Trust can support, such as yearly auditing fees, independent Trustee 'salary' and other red tape yearly costs.

    Whilst theoretically any attorney could create your trust, there is a minefield in creating due to changing regulations and in in maintaining the trust.
    I strongly suggest you contact a specialized 'trust' attorney for your solution.

    I have used this crowd for many years. IPROTECT Trust Attorneys
    Victor - Knowledge is a blessing or a curse, your current circumstances make you decide!
    Solar pumping, Solar Geyser & Solar Security lighting solutions - www.microsolve.co.za

  5. Thanks given for this post:

    Gene (25-Dec-24)

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    This is a good analysis and gives sound advice, as do the posters above.

    https://www.taxtim.com/za/blog/donat...-and-receiving

  7. Thanks given for this post:

    Gene (25-Dec-24)

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