Much focus is being placed on the future viability of trusts as estate planning tools. The Davis Tax Committee has been established with one of its objectives being to investigate and make recommendations, with a view of curbing the misuse or abuse of the trust form. A number of these recommendations have been incorporated into legislation. This has resulted in the trust being viewed as having been, or about to be, stripped of the benefits which make it a viable estate planning tool. This mini-dissertation investigates as to whether the trust is still a viable estate planning tool. Chapter 1 presents the research problem and poses research questions that will be discussed with the aim of establishing the viability of the trust as an estate planning tool. In attempting to address this research problem chapter 2 deals with an investigation into the viability of employing the trust as protection mechanism of (estate) assets. Questions pertaining to the insolvency of the various parties to the trust are addressed. Furthermore, the possibility of trust assets being considered part of the founder’s estate during divorce proceedings, are investigated. Chapter 3 considers the impact of taxation on the viability of the trust as an estate planning tool. An in depth discussion is undertaken pertaining to the Davis Tax Committee and Taxation Laws Amendment Act of 2016 and Taxation Laws Amendment Bill and Act of 2017, particularly the impact section 7C of the Income Tax Act 58 of 1962 has on loans by so called “connected persons” to the trust. Chapter 4 discusses further non-taxation uses of the trust and certain estate planning techniques incorporating trusts in practice. Chapter 5 contains the conclusion. It is submitted that the trust is still a viable estate planning tool.
Mini Dissertation (LLM)--University of Pretoria, 2017.