When a person is injured due to the negligence of another person, a court of law makes a quantified award to the injured person.
The award makes provision for funds to last the rest of the injured person’s life, to cover for loss of income, medical expenses, future medical expenses, etc.
Most often, the injured person cannot administer the funds himself. The court will then order the funds to be protected by nominating Rodel Fiduciary to establish an inter vivos trust to administer the award on behalf of the injured party.
An inter vivos trust is a trust that is established by the founder(s) during his, her or their lifetime and is set up according to the specifications of the founder(s). Trustees are nominated by the founder(s) in the trust deed. They are responsible for administering the assets in accordance with the trust deed and the laws relating to trusts. Your beneficiaries listed in the trust deed will benefit from the trust assets.
- To protect or preserve a Trust Fund for the benefit of one or more Beneficiaries over a period of time.
Other examples of such a TRUST is one formed for the purpose of purchasing a holiday home for use by a succession of Beneficiaries, or holding certain investments such as share portfolios for the benefit of one or more Beneficiaries over a period of time.
- To protect family assets from the business risks of the Founder.
The Founder would have the choice to either donate his assets to the TRUST which would involve a donations tax, alternatively, he could sell his assets to the TRUST in which event the advantage will be that the growth in the value of the assets would take place within the TRUST and will not form part of the Founder’s estate.
- To save on Estate Duty.
- To provide for the maintenance of a spouse and children in consequence of a Divorce Order.
- To carry on a business.
- To create and preserve a Trust fund for some charitable purpose.