I see it so many times in practice that clients just assume everything is still in order with their Trust and providing us with a copy of his/her Storage Trust document.
The most popular reason buying in a trust is for estate purposes. Be careful, as many times the funds still come from an individual to fund the transaction and the loan will be recreated in favour of the individual (which will form part of his/her estate) and haven’t kept (Section 7 C of Income Tax Act) in mind where donation tax can be incurred on by the Lender.
Keep records of any changes of the Trust, for example, changing of Trustees, adding of beneficiaries etc. follow the procedure as prescribed in your Trust document.
This is important as it is a requirement for a valid trust as well as proper financial records by at least an accountant and no necessarily an audited statement (depending on the type of Trust.
ACTING ON BEHALF OF A TRUST
A trustee can only act on behalf of a trust if he is duly appointed and the Master issued a Letter of Authority. If a Trustee or someone else acts on behalf of a Trust, there must be a resolution signed by all existing Trustees authorizing the person to act on behalf of the Trust and such resolution recording the boundaries of the person’s authorization. If you enter into a contract with a Trust make sure about the above.
In short, it is good practise to review your Trust regularly and understand the purpose of the Trust and Tax implications.
Every situation is different and therefore if it is pro-active you can avoid unnecessary negative consequences.
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