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9 Cards in this Set
- Front
- Back
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Definition of trust document:
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• Written agreement. • Testamentary writing. • Court order in terms of which the trust is created. |
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Definition of a Trust: |
A trust exists when a person (the founder of the trust) has handed over , or is bound to hand over, to another (the trustee) the control of property which is to be administered or disposed of by the trustee for the benefit of another (the beneficiary) or some impersonal object |
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Types of trusts |
Bewind trust- founder may make a gift or bequest of the trust property to the beneficiary , but vest the control to another (the trustee) Ownership trust- ownership is transferred to the trustee Special trust - For a person with a disability, or deceased relative 1, beneficiary under 18 Trust inter vivos- between the living Trust mortis causa- in contemplation of death |
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For a trust to be valid |
* Founder must have intent to create the trust * Expressed in such a manner as to create a binding obligation * Defined with reasonable clarity * Defined with reasonable certainty * must be lawful |
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Powers of Trustees |
* Power of assumption- power to appoint new trustees * Power of subrogation- if trustee resigns can point a new trustee to replace * Power of substitution- move and replace other trustees If not stated in the Trust instrument- must be appointed by master |
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Disqualified Trustees |
1. A person / spouse who has written or witnessed the will 2. A person of unsound mind 3. A person who does not meet the trusts requirements |
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Removed from office |
- Convicted of an offense - Fails to give security within 2 months - trustee is sequestrated or liquidated - Trustee is mentally ill or unable to act - Fails to perform satisfactorily |
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Duties of a trustee |
Primary duty is to give effect to the trust instrument and administer the trust property so that the trust is realised. Duties administering * Must administer according to trust instrument * Exercise independent discretion * Per serve property trust * Try receive reasonable returns * Account to beneficiaries * Keep trust property separate from his own * Per serve all documentation for 5 years * Act impartially and exercise discretion * Act with care, diligence & skill |
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Termination of the trust |
* The object of the trust is realised *Trust property is destroyed and cannot be replaced * No beneficiaries have been appointed * Acceleration of benefits of a capital beneficiary has taken place * The court orders |
