What is a Trust?
A Trust is a structure to which property is transferred by the founder or third party to beneficiaries nominated in a trust deed. The trust property is administered by trustees appointed in the trust deed or will for the benefit of one or more beneficiaries. The trustees are thus not the owners of the trust property, they simply manage the affairs of the trust for the benefit of the nominated beneficiaries.
Overview of Trust in Namibia
Namibian Trust Law is unique in a number of aspects. Namibian Trust Law is a mixture of English Trust Law and Roman Dutch Law. The basis for Namibian Trust Law is found in the Roman Dutch Law principle of stipulatio alteri.
Namibian Trust Law is regulated by the Trust Moneys Protection Act 34 of 1934. The Trust Moneys Protection Act has appointed the Master of the High Court as the regulatory authority over trustees and trust moneys. The Financial Intelligence Act of 2012 has further placed certain duties and responsibilities on trustees of a Namibian Trust.
Namibian Trusts are normally used for the following purposes:
1. As a tool for estate planning;
2. As a vehicle to conduct business operations;
3. In order to separate certain specific assets from the remainder of the persons estate/portfolio;
4. In order to protect assets from creditors;
5. In order to protect assets from a spouse in a matrimonial matter; and
6. In order to manage assets on behalf of a person who is unable or incapable of managing the assets himself.
How To Register A Trust In Namibia
- Trust Deed
- Self attested copy of the proof of identity of the settler ( passport, voter ID, driving license or any such photo ID)
- Self attested copy of the proof of identity of each trustee (Aadhaar card, passport, voter ID, driving license or any such photo ID)
- Proof of the registered office address of the Trust (electricity/water bill or registration certificate)
- Non Objection letter signed by the owner
Frequently Asked Questions (FAQ’s)
How do I set up a trust in Namibia?
A Namibian Trust is established through a donor donating a assets (normally a nominal amount of money, but is may be another asset) to the trustees of the trust to administer the assets to the benefit of the beneficiaries in terms of the objective set out by the donor in the trust deed. The nature and structure of a trust that is to be established will be determined by the objective of the donor and the eventual beneficiary.
Is it necessary to register a trust in Namibia?
Movable property: A trust in relation to movable property can be declared as in the case of immovable property or by transferring the ownership of the property to the trustee. Hence, registration is not mandatory.
Do trusts need to be registered in Namibia?
Trusts that hold property will, like other trusts, only need to be registered if the trustees incur a liability to tax. Thus, if the property is occupied by a beneficiary – and is not income-producing – no requirement for registration will exist unless a taxable event occurs for IHT, CGT or SDLT purposes.
How long does it take to get money from a trust fund in Namibia?
The majority of trusts can get a preliminary distribution maybe within several months after Mom and Dad’s deaths, and then ultimately it should be about one year to eighteen months to get the final distribution.
Who can be a trustee in a trust in Namibia?
The only legal requirement in Namibia for a person to be a trustee is that she or he is at least 18 years old and “of sound mind.” The Trustee must also be a U.S. citizen to avoid adverse tax consequences.
Does a family trust need a bank account?
You should open a bank account for the trust in the name of the trustee. This should occur after the discretionary trust has been established and the trust deed stamped (if stamping is necessary). The bank may require the trust ABN before it will open the account.
What are the three fundamental requirements of a trust?
There are three generally stated requirements for the trust subject matter or “res”: It must be: an existing interest in property (at the time of trust creation and throughout the existence of the trust); capable of ownership and alienation (i.e., transferable to another person); and.
How much does it cost to set up a trust account in Namibia?
Family trust cost between $100-$700 to set up (depending who you get to do it and which state you live in – NSW charge a $500 fee whereas most states like QLD charge nothing, see here for details). When setting up a family trust, either get your solicitor to fix you up or use cheaper online legal services.
Why would a person want to set up a trust?
To manage and control spending and investments to protect beneficiaries from poor judgment and waste; To avoid court-supervised probate of trust assets and be private; To protect trust assets from the beneficiaries’ creditors; To reduce income taxes or shelter assets from estate and transfer taxes.
Is it better to have a will or a trust in Namibia?
Deciding between a will or a trust is a personal choice, and some experts recommend having both. A will is typically less expensive and easier to set up than a trust, an expensive and often complex legal document.
When should you create a family trust?
You might also set up a family trust if you have a child or other family member who requires specialized medical care. Placing assets in a trust can exclude them from Medicaid eligibility guidelines, which is something you may be concerned with if your family member requires long-term nursing care.
Who Cannot be a beneficiary of a trust in Namibia?
Who can be a beneficiary of a Trust? Any person capable of holding a property can be beneficiary. There is no restriction on the nature of person. In a private trust the beneficiaries are one or more ascertainable individuals.
Are Will trusts a good idea in Namibia?
Creating a property protection trust (sometimes called an asset protection trust or a property preservation trust) through your will allows someone to benefit from your estate after you have died as if he or she owned the assets, without actually inheriting it.
When must a trust file a tax return in Namibia?
The trust needs to file a return if it has a gross income of $600 or more during the trust tax year or there is a nonresident alien beneficiary or if there is any taxable income. An estate needs to file a return if it has a gross income of $600 or there is a nonresident alien beneficiary
Are beneficiaries of a trust beneficial owners?
A ‘beneficial owner’ is any individual who ultimately, either directly or indirectly, owns or controls the trust and includes the settlor or settlors, the trustee or trustees, the protector or protectors (if any), the beneficiaries or the class of persons in whose main interest the trust is established.
Can a trustee do whatever they want?
The trustee cannot do whatever they want. They must follow the trust document, and follow the Namibia Probate Code. More than that, Trustees don’t get the benefits of the Trust. The Trustee, however, will not ever receive any of the Trust assets unless the Trustee is also a beneficiary.
Can a trustee refuses to pay a beneficiary in Namibia?
The trustee’s authority, however, is not absolute; it’s subject to the superior authority of the probate court and the fiduciary duties of loyalty and care imposed on all trustees by state law. For this reason, a trustee may not arbitrarily refuse to pay a beneficiary out of the assets of the decedent’s estate.
How do trusts avoid taxes in Namibia?
They give up ownership of the property funded into it, so these assets aren’t included in the estate for estate tax purposes when the trustmaker dies. Irrevocable trusts file their own tax returns, and they’re not subject to estate taxes, because the trust itself is designed to live on after the trustmaker dies.
Can you withdraw cash from a trust account in Namibia?
The short answer to the question, “Can you withdraw cash from a trust account?” is Yes, but there are some caveats. … If you have created a revocable trust and have appointed someone else as trustee, you will have to request the cash withdrawal from the person you appointed as the trustee.
Can I live in a house owned by my trust in Namibia?
A beneficiary does not have to pay rent to live in a property held in the corpus of a trust (subject to the trust deed), any more than a person must pay rent to live in any property held anywhere (with the owner’s permission). the trustee can allow the trust to make no money. therefore no income. no distributions.
What is difference between private and public trust?
So the basic difference between both the trusts is that in the Public Trust, the interest is vested in an uncertain and fluctuating body, whereas in the Private Trust, the beneficiaries are definite and ascertained individuals.