Women Look to Trusts to Protect their Families’ Assets

With South African women increasingly looking for ways to get their financial affairs and those of their families in order, it is crucial that they are aware of the various options available to them that best meet their needs and objectives.

That is according to Marteen Michau, head of trust and fiduciary services at RMB Private Bank. “We’ve noticed a definite trend in women approaching the bank looking for advice on ways to grow and protect their family’s assets,” says Michau. "It seems to be a priority for most women and I guess some men just don't have the time to do it."

According to Michau, an often overlooked means of housing family assets is through the use of a Trust. A Trust is an agreement between the Founder of the Trust and Trustees. In terms of this agreement, the Trustees undertake that they will administer the Trust's assets with the necessary care to the benefit of the beneficiaries.

“The use of Trusts is a good way to ensure that assets are objectively managed and controlled and protected by appointed Trustees in the best interests of the beneficiaries,” says Michau.

She says that on the whole, most people only wake up to the idea of setting up a Trust far too late and do not realise that is often better to let assets grow in a Trust than in their own names. “Ideally Trusts should be considered before assets are being built up, with the ultimate objective to protect assets that could grow in value.”

She says there are many situations where the use of Trusts can be extremely beneficial for women. “Trusts should be considered in situations of business ownership where assets need to be ring fenced or where the family structure might dictate that assets be separate, such as in the case of children from previous marriages. They are useful in the event of a death, where often no Will exists or where the assets are frozen until the estate is wound up.”

She says she has seen an increase within the last year of women opting to set up their own Trusts to protect their children or provide education to their wider family, such as grandchildren. “Some women have set up charitable Trusts where, once registered with SARS as tax exempt trusts, donations to it will be donations tax-free.”

She says one of the most important aspects of setting up a Trust is ensuring that it correctly meet your objectives. “We believe in providing a holistic assessment of our clients’ investment and asset exposure across all legal entities and in their personal names before we define the optimal financial structure and align it to their investment objectives and estate planning specifics,” Michau comments. “We pride ourselves in building close relationships with our clients providing ongoing advice with future options for decision-making.”