The Trust Act in South Africa

In South Africa, trusts are governed by the Trust Property Control Act No. 57 of 1988 (TPCA). All decisions and actions taken by the trustees must be made with reference to the trust deed and the TPCA, which regulates certain administrative aspects relating to trusts.

The TPCA document contains an in-depth description of the act. Below are several important pieces of information from the act to note when considering creating a trust, whether it be inter vivos or testamentary.

Appointment of trustee and co-trustee by Master

  • If the office of trustee cannot be filled or becomes open, the Master shall, after consultation with so many interested parties as he/she may deem necessary, appoint any person as trustee.
  • When the Master considers it desirable, he/she may, notwithstanding the provisions of the trust, appoint as co-trustee of any serving trustee any person whom he/she deems fit.

Foreign trustees

When a person who was appointed outside South Africa as trustee has to administer or dispose of trust property in SA, the provisions of the TPCA will apply to this trustee in respect of the property, and the Master may authorise him/her to act as trustee in respect of that property.

Care, diligence and skill required of trustees

  • A trustee must act with the care, diligence and skill which can reasonably be expected of a person who manages the affairs of another.
  • Trustees are prohibited from using the trust assets for their own benefit, unless the trust deed specifically allows for this.

Trust account

Whenever a person receives money in his capacity as trustee, he/she must deposit this money in a separate trust account at a bank or building society.

Separate position of trust property

Trust property must not form part of the personal estate of the trustee, unless he/she is, as the trust beneficiary, is entitled to the trust property.

Failure by trustee to account or perform duties

If any trustee fails to follow a request by the Master, or to perform any duty imposed upon him/her by the trust instrument, or by law, the Master or any person having an interest in the trust property may apply to the court for an order directing the trustee to comply with such request or to perform such duty.

Removal of trustee

A trustee may at any time be removed from his/her office by the court if the court deems this removal to be in the interests of the trust and its beneficiaries.

There are a few reasons as to why a trustee may be removed, such as:

  • The trustee has been convicted in the Republic or elsewhere of any offence of which dishonesty is an element or of any other offence for which he/she has been sentenced to imprisonment without the option of a fine.
  • The trustee’s estate is sequestrated, liquidated or placed under judicial management.

The above information is a simplified overview of the TPCA. For an in-depth reading of the act, click the following link: http://www.justice.gov.za/legislation/acts/1988-57.pdf

Read more about the types of trusts in South Africa.