Hot topic – The role of the independent trustee

by | Feb 7, 2018 | Advisory Services

Recent judgements have once again pointed out the essential requirement that the control and enjoyment of trust assets are completely separated.

So what does this mean?

Trustees are appointed in a fiduciary role, meaning that whilst they have the right to control and deal with the assets of a trust – the enjoyment of those assets is for the beneficiaries of the trust. Failure to separate this control and enjoyment can have a wide variety of detrimental implications from inclusion of trust assets in divorce settlements to SARS charging estate duty on deceased estates and personal creditors of “trustees” claiming reparation from trust assets.

So what happens in a case where the trustee is also a beneficiary of the trust?

The answer – Nothing!

However, there is a caveat to this answer – you would need to prove beyond all doubt that the decisions to make any payments or distributions from the trust was made by all the trustees without any bullying / coercion or just lack of independence.

So what is the answer?

The appointment of an independent trustee – but more importantly, a professional independent trustee.
Sentinel International can fulfill not only the independent trustee role but as a professional trust company, is well equipped to ensure that your trust is compliant with all legislation from the Trust Property Control Act and theIncome Tax Act.

This is an area of focus for SARS at present and it would be advisable that matters are rectified sooner rather than later. If you are not sure about your trust, please do not hesitate to contact us to arrange a consultation with one of our trust officers.