This article looks at the cost of running an Intervivos Trust which is set up while you are still alive. If you have been considering setting up a Trust, one of the most important facts to take into account is the cost of setting up and running the Trust as the benefits must justify the costs.

Take note of the compliance requirements of running a Trust:

• The Trust must appoint an auditor
• The Trust must be registered for tax purposes
• Resolutions taken by the Trust must be put in writing
• The Trust must hold an annual general meeting

All of this comes at a cost and the compliance matters might necessitate appointing an independent trustee. All decisions and transactions would need to be approved by the trustees via a resolution.

Some of the costs are:

• The drafting fee for the Intervivos Trust deed ranges between R6000 to R10 000
• Initial donation of R100 to the Trust, to validate the Trust
• Bank charges
• Management fees
• Monthly fees, these can be a minimum of R780 per month
• Review of Trust deed estimated at R4000
• Amendment of Trust deed estimated at R4000
• Income Tax preparation fee
• A distribution fee estimated at 2,3% on the capital value of assets released from the administration
• Costs related to fixed property, settlement fees, shares and other assets to be treated as an expense and charged for separately

We encourage you the read the following newsletters to get some background on Intervivos Trusts:

• Is it time to have a Trust? Parties to a Trust
• Key points about running a Trust
• Taxation of Trusts

If you do not have a Last Will and Testament or you would like to review your existing one, please contact us and we will help you with a FREE estate planning consultation.