How to protect a trust The Offshore Perspective Sham or not

1
How to protect a trustThe Offshore
PerspectiveSham or not.

• Anton Maskowitz
• antonm_at_spi.sanlam.com

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Agenda

• The basics
• Sham vs Alter Ego
• Settlor/Beneficiary control
• Reserved Powers
• Communication
• Conclusion

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The Basics

• Trust Deeds
• Declaration Deed
• Settlement deed
• Blind Trusts
• Charitable Beneficiaries
• Protectors (SA specific)
• Co- Trustee/excess powers
• Settlor
• Independence

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Sham vs Alter Ego

• Concept of a Sham Trust
• Not recognised in SA (yet)
• Requirements
• Consequences
• SARS, Divorce settlements and maintenance claims?

5
Settlor/Beneficiary Control

• Treating trust as bank account
• My Trust
• Managing/Controlling Trust Investments
• Reserved Powers
• Investment Managers/Advisors
• Directors on underlying Companies
• Settlor/Beneficiary also Protector

6
Communication

• Steer clear from instructing trustees
• Know your trustees and vice versa
• Annual Trustee Meetings
• Update trustee re personal and family
  circumstances
• Review Letters of Wishes regularly

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Conclusion

• Dont give without giving
• Independent/Corporate Trustee in well regulated
  environment
• Understand and appreciate Trustee Powers at
  outset
• Steer clear from instructing trustees
• Care Divorce Settlement/Maintenance claims and
  SARS not reliant in Sham, will most likely
  succeed on alter ego.