A juristic person, also known as a legal person or legal entity, is an entity that has the same legal rights and responsibilities as a natural person. Understanding the capabilities of a juristic person is especially important for business owners, property investors, and entrepreneurs.
We’ve recently received a few concerns regarding the assets held in your trust and whether these will affect your estate administration costs.
A trust is a legal entity that holds, manages, and takes responsibility for your assets. Within a trust, there are various role players involved, including the founder, trustees, and beneficiaries. Each of these parties has a different role to play.
It’s important to understand that as a natural person (meaning you) you do not have to take on all of the responsibilities yourself. You can divide your assets between your estate and various legal entities.
Examples of these legal entities include:
- Companies
- Trusts
- Close Corporations
Since a trust is a juristic (legal) person, it can legally hold assets in its own name, just like a natural person can. This means that the assets held in your personal name can also be held in a trust’s name, provided they are correctly transferred.
A TRUST is an independent legal entity, and an ESTATE, refers to the assets, liabilities, and debts left behind by a deceased individual.
It’s important to understand that a trust and a natural person are two separate legal entities. Therefore, when a person passes away, the assets held by their trust are not considered part of their personal estate. These are not the same person’s assets.
Does a trust affect your estate?
No, because they are distinct legal persons, each with their own assets and responsibilities.
It’s important to understand that each of these entities has its own ‘personality,’ structure, and purpose depending on the situation.
Consult your lawyer for more information on these various entities and to determine whether they should form part of your PORTFOLIO.
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