Eienaarskap van trustbates

Abstract

This research investigates the protection of trust assets in terms of section 12 of the Trust Property Control Act 57 of 1988 and the discretion of the courts to ‘disobey’ the Act with regard to their decisions in divorce matters and specifically whether trust assets must be included in the husband’s estate for purposes of a redistribution order in terms of section 7 of the Divorce Act 70 of 1979. The norm is to create a trust and transfer certain assets into the trust in order to protect those assets against claims from potential creditors. Trusts are also established for the advantages it offers parties from a tax and estate duty perspective. The aim of this investigation is to emphasise the basic principles for the creation of a valid trust as well as the compliance with the statutory duties and procedures during the administration of the trust and the consequences if not adhering to these principles. The consequences of not adhering to the trust principles vary and depend on the facts of each case. The key cases in this research with regard to redistributions orders is Badenhorst v Badenhorst 2006 2 SA 255 (HHA) and Jordaan v Jordaan 2001 3 SA 288 (K). The assets in an inter vivos trust are protected, but if the trustees do not relinquish control of the assets, the trust can be declared the alter ego of such a trustee and leave the trust assets open to attack from creditors. The key case for not adhearing the the trust priciples with regard to the administration and compling with the statutory duties and procedures is the case of Land and Agricultural Development Bank of SA v Parker 2004 4 All SA 261 (HHA). The purpose of this research is to determine when, which factual circumstances are taken into consideration and to what extent the courts authority stretches, in determining whether a Trustee acquires an ownership right to trust assets without qualifying as a trust beneficiary