Sinking Funds Demystified

 Sinking funds offer a unique combination of tax efficiency, estate planning benefits, and structured liquidity for long-term investing. When used appropriately, especially for goals like legacy planning or funding future liabilities, they can be a powerful tool in a diversified wealth strategy, especially for high-net-worth individuals and trusts. This article aims to unpack the key features, limitations, and strategic uses of sinking fund policies in South Africa.