FAMILY HOME IN A TRUST…
Introduction
Considering whether to put your family home into a trust or is your house currently
registered in a trust? What happens to the immovable property on divorce? Is there a
share of the value of the property given to you? Does the types of marriages in South
Africa impact on the discretionary trust assets?
Facts
The Supreme Court of Appeal (SCA) in a recent decision of WT & others v KT
(933/2013) [2015] ZASCA 9 (13 March 2015) the court considered the following
scenario.
The facts briefly: Husband and wife were married in community of property. The family
home was registered in a discretionary family trust of which husband and his brother
were the trustees, the beneficiaries to be chosen by them from amongst the husband’s
children.
The trust bought a property one year after the parties married and the parties lived in
the property for period of 9 years until the divorce action was brought. The wife on
divorce, claimed 50% share in the family home in that it formed part of the joint estate.
Joint estate
The wife argued that the husband misled her by saying house should form part of the
joint estate as it was registered in the name of the trust merely to protect it from the
business creditors. It was further her understanding that they would agree on who
would be the beneficiaries and that she would get 50% of the value on divorce.
The Supreme Court of Appeal held that the immovable property remains part of the
trust assets and does not form part of the joint estate. The wife was neither a
beneficiary nor a third party to challenge the husband’s management of the trust.