A trust is a useful entity in some circumstances as the assets it owns do not belong to you and are managed for the benefit of its beneficiaries.
Here are 3 reasons why you should have one:
Long term planning for your family
If you want your assets to provide for the long term for you, your children and grandchildren then a trust may be an appropriate vehicle. In the event of your death the assets in the trust will not trigger capital gains tax as they will not have to be sold or transferred which is the case in your personal estate. Estate duty is also avoided as the assets are owned by a trust which has perpetuity as it continues after your death. A trust never dies.
Minor children
If parents die leaving behind minor children this causes huge complications for their financial future. If there is no will the assets will be cashed in and the proceeds invested in the Guardian Fund administered by the Master of the Supreme Court.
A testamentary trust which is set up in terms of your will is ideal in these circumstances as it creates a structured entity which provides for the financial well being of your children up to an age where they can take over control of the assets for themselves.
Asset protection
When you set up an irrevocable trust you relinquish control and ownership of your assets in the trust. If you fall into a legal problem leading to a claimants forcing you to to liquidate, your assets in the trust cannot be included as they are not owned by you. This form of asset protection should be considered carefully with expert advice.
A large estate attracts tax and estate duty. A trust can avoid these costs in a very legitimate way. It boils down to costs verses benefits at the end of the day.