DANIEL BAINES: Advantages of setting up a trust to benefit a disabled person
The disabled person may be looked after by the trust upon the death of the founder
While much has been written about the continuing effectiveness of trusts in SA due to recent changes in our legislation, there is one type of trust that is not affected by recent amendments and which can still add great value to the life of disabled people. This type of trust is called a type A special trust, which may be set up to assist people with disabilities. The requirements of a type A special trust are: • The trust must be established solely for the benefit of one or more people who have a disability; and • This disability incapacitates the disabled person(s) from earning sufficient income for their maintenance or from managing their own affairs. If the trust is set up for more than one person, the people must be related. There is, however, no requirement that the founder of the trust is related to the disabled person. In other words, the founder of the trust may set up a trust for a friend who is disabled, but that trust cannot have another beneficiary (besides the friend) ...
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