Trusts can play an important role in protecting and managing assets for minor beneficiaries, but they are not always the right solution.
Speaking during a Financial Planning Institute of Southern Africa masterclass, Renate Jute said advisers should first consider whether a trust’s costs, governance requirements and administrative burden outweigh its benefits. What may look good in the thought process and on paper may not actually work in real-life planning, she warned.
Renate highlighted common pitfalls, including poorly drafted trust deeds, unsuitable or uninformed trustees, excessive trustee discretion and trusts established primarily for tax reasons. She stressed that “most trust problems are born in drafting and raised in administration,” making proper governance essential.
Advisers should regularly review trust deeds, trustee succession, beneficiary nominations, estate liquidity and the alignment between wills, life policies and trust structures. Ultimately, planning for minors should prioritise protection, accountability, practical access to funds and long-term family stability.
Read the full article here.
Renate Jute, CFP®, FPSA®, TEP®, is founder of Noble Prosperity and a FISA Council Member
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