TRUST COMPLIANCE

Someone once said “If you can keep your head when all about you are losing theirs, it’s quite possible that you have not grasped the situation”. This is true of any relationship to a Trust and especially any relationship to a Black Empowerment (BEE) Trusts.

But this much you know: Founders of Legal Trusts register their Trusts with the Master of the High Court. Trustees (Administrators of the Trust) are appointed to act on behalf of the Trust beneficiaries. If you are involved in a Trust, you know that it was created for the founders’ peace of mind.

It follows that family homes are registered in Family Trusts. Shareholders of Companies transfer their shares to their Share Trusts. Companies transfer their shares to Black Empowerment Trusts. As a general rule, people involved in Trusts, trust in these special kinds of structures just because they deem themselves trustworthy.   

However, your Trust is not your mother. Your mother assumed complete responsibility for you to her own perpetual detriment. But a Trust can be a liability. A Trust Deed is unlike a mother and more like a child – and a needy child. Trusts tend to draw you from your placid tranquil ignorance and into a cruel sudden attack from the dark side of administration – an attack from “the unknown”. Let it be known that a Trust can be a blessing, but most probably not without a great volume of annual tender love and care.

Answer in the affirmative voice if you can:

1. The Founder of my Trust did not make any mistakes when the Trust was registered;
2. From the founding date, all changes in law and all changes in my circumstances are annually addressed with Trust amendments and adapted Trust strategies;
3. The Trustees of my Trust reduce annual Trustee meetings to writing and that comply to all current legalities of this country;
4. Trustees of the Trust arrange annual Trust meetings and the substance of these meetings take precedence over the legal form of the Trust according to the law;
5. No single Trustee has more control over the Trust administration than any other Trustee and I can prove that the Trust is not unduly influenced or the extension of the person who controls trust activities;
6. My External Trustee is a natural person who can prove that he administrates the Trust at arm’s length
7. All matters pertaining SARS are annually addressed, whether it be personal loans, the interest on personal loans, tax submissions or capital gains tax;
8. The Trust had its bank account registered on or before September 2014;
9. The beneficiaries of the Trust understand that they are stakeholders and that the Trustees execute the terms and conditions of the Trust deed for the sole interest of the Trust beneficiaries/participants;
10. And let us say this: I am sure that my Trust, whether it holds my family property, my Company shares, asset, or future right to receive a policy, will not pay any estate duty. Many people are surprised to learn that Trusts are not exempt from annual income tax and neither are they exempt from estate duty.

BEE is a ball game like no other. It is like playing rugby but using a tennis scoreboard. The marriage of interests in a BEE Trust requires the full-time care of a specialized commercial nurse. Our warning is: “do not live in this world alone”. Seek help while the ignorant shadows of day hide the lines of your otherwise damned corporate silhouette …