| Some
10 years ago and as a newly qualified Attorney, I was approached
by a woman who was married to an extremely wealthy man. The
couple had two children and had been married for some 7 years.
In this time, the husband had accumulated a significant estate
worth in excess of a Hundred Million Rand - still serious
money today. Regrettably for the woman concerned, the vast
majority of the assets were completely out of her reach in
a divorce situation and she was forced to take a significantly
reduced settlement. This was far less than had she been Party
to the Trust. This incident, early in my career alerted me
to the effectiveness of Trusts, particularly in South African
Law as a planning tool. Unlike the English Law of Trusts,
South Africa does not have the equivalent Statute of Elizabeth.
|
Some
years later I was approached by a client who had started from
relatively humble beginnings and had accumulated a vast business
and a number of valuable properties. My client was involved
in the construction industry as a major sub-contractor and
was often at the mercy of large contractors and building companies.
I advised my client to transfer his properties and assets
into a Trust, primarily to protect his children and wife in
the event of his untimely death. Some five years later, as
it turned out, my client undertook major construction work
for a hotel-developer. The hotel developers went bankrupt
and failed to complete the construction of the hotel. As a
result of this, my client was not paid in excess of Two Million
Rand owing to him, which resulted in his company going into
liquidation. |
As
is common practice with Banks, my client had signed personal
suretyships on all the overdrafts and was liable in a similar
fashion for many of the debts of his company. Fortunately
the advice I gave my client years earlier, saved the major
portion of his assets from attachment by his creditors and
the liquidator of his company. There are many similar stories
that can be told of the benefits of a Trust and I have always
been of the firm view that they form an essential part of
ones wealth-preservation strategy. It is said that the ability
to accurately forecast and control time lies at the heart
of every effective wealth-building strategy. The is even more
true for Trusts where, the sooner one sets up a Trust and
transfers ones assets, investments and companies, the greater
the long-term wealth building benefits will be. |
