By Willem van der Merwe , Global Solutions Specialist, - FNB International Trustees
One of the major concerns for South African clients is how they can protect what they have accumulated over time. They don't want to expose all of their assets to the various risks associated with having all their assets in South Africa and being exposed to one of the worlds' most volatile currencies - the Rand. The well-known phrase "don't keep all your eggs in one basket" comes to mind.
As South Africans are looking for ways to mitigate these risks, estate planning is by no means a foreign term and most South Africans are aware of the benefits that appropriate estate planning can offer. Such benefits would typically include the spreading of risk, safeguarding of assets, streamlining succession of generational assets to a next generation and in addition,often also tax efficiencies. Although there is an awareness of the benefits of estate planning, it is often the detail of what such planning should entail, that causes uncertainty. This includes the costs associated with such planning and the establishment of any potential estate planning structures. There is a common perception that estate planning, especially international estate planning, is only for the super wealthy. FNB/RMB in conjunction with their Guernsey-based offshore fiduciary service provider - FNB International Trustees (FNBIT), have identified this need and concern and are offering cost-effective solutions to solve for specific client needs across the wealth spectrum.
As the need was identified for individuals to protect their assets in appropriate structures from an earlier stage in their wealth building phase or even just to save for tuition of children wanting to study abroad, FNBIT specifically introduced a trust offering providing a very cost-effective solution. By leveraging FirstRand's international bank - FNB Channel Islands, FNBIT is able to deliver a full discretionary Guernsey trust equipped with a trust bank account at a marginal cost compared to typical standard offshore trust offerings. This offering of FNBIT, referred to as the Cash builder trust, enables individuals to start saving in an offshore trust and building the assets of the trust over time without diminishing capital due to the cost of administrating the trust. As FNBIT is an independent fiduciary services business, this offering is not only limited to FNB clients. Flexibility is key and once the funds have accumulated in the trust account, the trustees can accommodate other investment options and revert the trust to standard trust costs at such time. Such a conversion might also be actioned when circumstances change, such as when additional assets are to be transferred to the trust.
Key Take-out
As would be the case with any estate planning discussion, it is important to consider the facts of each and every case to consider what would be appropriate advice in each situation, but it is clear that offerings such as the Cash builder trust is aimed at assisting clients to safeguard and protect their assets for their families and making international estate planning structures more accessible to more individuals.
FNB Fiduciary (Pty) Limited Registration Number 1986/003488/07- A subsidiary within the FirstRand Group of Companies. An Authorised Financial Services Provider.
