Those who wish to provide an income for disabled dependents (both while they, the donors, are alive and after they have passed away) should take a good look at the way in which a certain beneficiary has used a trust to provide for a disabled child now being cared for by the Woodside Special Care Centre in Rondebosch East, Cape Town, says Bill Rawson, Chairman of the Rawson Property Group.
The beneficiary here, says Rawson, realising that the dependent’s support income will have to rise year by year, has bought a fairly valuable property which provides sufficient income to pay the Woodside Special Care Centre’s charges each month and which will increase in value, with a concomitant increase in rent, as time moves on. The deal, he says, is simple enough to understand and to administer.
What is particularly significant, says Rawson, is that the trust conforms to certain legislation, which, in view of its charitable purpose, makes it tax free.
“At the Rawson Property Group,” says Rawson, “we are now investigating just how broad the terms of the relevant act are. It does appear that it can have wide applications, e.g. educational needs or the payment of after school job training.”
Those interested should keep in touch with their estate agents, says Rawson. With the rise in buy-to-let property investments, more and more people are now going this route to ensure inflation matching incomes, either for themselves or for those they see as their responsibility – and the trend to property investment, he adds, is now enhanced by the volatility and uncertainty of South Africa’s economy which is being held back by strikes and high wage increases.
“The price of these sometimes wild ‘social adjustments’ will inevitably be paid in lower growth and a slowing of foreign investment,” says Rawson. “These make certain property sectors, in which the demand continues to exceed supply, a safe haven.”
