Should I wind up a will trust?
I am the sole trustee and a beneficiary, with my children, of my late husband’s will trust. The trust was set up 30 years ago to protect his estate from estate duty and was then valued at R1.5 million. The assets (two modest properties) are now worth much more than that, but would be subject to capital gains tax (CGT) and other costs if the assets were sold.
Meanwhile, the trust is expensive to administer despite the fact that there is very little activity in the trust – the properties are rented out and rental income is received, expenses are paid out, and funds are distributed occasionally to the beneficiaries to help them finance their studies.
I have been advised that I could wind up the trust, pay the CGT and other costs now, rather than later, and then have freedom to invest the assets any way we wish, for the benefit of the children. I can’t see South African residential property or rentals increasing in value greatly while our economy is struggling. I would be grateful for another opinion.