Published for comment on 7 August 2026, the Bill signals a decisive shift toward active, ongoing regulation of South African trusts.
Sentinel clients and co-trustees should take note of the proposed Regulation of Trusts Bill, 2026. The practical message is straightforward: trusts will need to be actively managed throughout their existence. Trustees will no longer be able to rely on historic records, occasional resolutions or informal administration. Proper governance documented decision-making and up-to-date compliance information will become central to risk management.
Below is a synopsis of the published bill.
Broad application across trust types
The proposed legislation applies broadly to trusts, including family trusts, testamentary trusts, public benefit organisation-related trusts and employee share incentive trusts. The new regime should therefore not be viewed as applying only to commercial, complex or high-value structures.
Beneficial ownership: a central compliance obligation
One of the most significant themes in the Bill is beneficial ownership. Trustees will have to maintain, and lodge prescribed beneficial ownership information with the Master. That information will need to be kept current, and changes will generally have to be reported within 10 days.
In practice, this means every trust should maintain a complete and current beneficial ownership register, supported by reliable source information. Inaccurate or incomplete information may attract sanctions, and certain trust actions may not proceed unless beneficial ownership information is up to date.
There is also a somewhat problematic aspect to the proposed definition of “beneficial owner”, particularly its reference to a natural person who ultimately “owns” trust property. This potentially conflicts with the fundamental legal principle that trust property is owned by the trustees in their capacity as trustees, and not by beneficiaries or founders. This would be an area worth considering carefully in submissions on the Bill.
Independent trustees and genuine independence
The Bill formally recognises the concept of an independent trustee and defines what independence means. Broadly, an independent trustee must not be related to the founder or another trustee, must have no personal interest in the trust property, and must be able to exercise independent judgment.
The Bill does not appear to require every trust to have an independent trustee. However, the Master may appoint one in prescribed circumstances, particularly where all trustees are beneficiaries, all trustees are related, and the trust conducts business with third parties. For professional trustees, the message is clear: independence must be substantive, not merely formal.
Trustee powers, investment decisions and documentation
The Bill clarifies and expands trustees’ powers, subject to the trust deed, by giving trustees broad powers akin to those of an owner where necessary to administer or dispose of trust property and achieve the trust’s objects. Trust deeds should nevertheless be reviewed to identify provisions that may conflict with, restrict or unnecessarily limit the proposed statutory powers.
This is potentially useful because trustees have historically had to rely heavily on the powers contained in the trust deed.
A prudent investor standard
Trustees will be required to invest as a prudent investor would invest. The Bill identifies factors such as diversification, preservation of capital, expected income, liquidity, risk, tax consequences, investment costs and the trust’s overall investment strategy.
Trustees should therefore be able to demonstrate how significant investment decisions were made and why they were considered appropriate for the trust. A resolution recording only the outcome may no longer be enough; trustees should retain the reasoning and supporting information behind the decision.
Annual financial statements and annual returns
For many trusts, the most immediate practical impact may be financial reporting. Trusts will generally have to prepare annual financial statements, subject to prescribed exemptions. An audit will not automatically be required, although a trust deed may provide otherwise.
The Master will also have the power to require the financial statements to be submitted.
For dormant and smaller family trusts this could be a substantial change, because trusts that have historically had little formal accounting activity will nevertheless need proper accounting records and annual financial statements.
Annual returns to the Master
Trusts will also have to submit an annual return to the Master, accompanied by prescribed information and fee. For existing trusts, the first return will generally be required within six months after commencement of the new legislation, with annual returns thereafter.
This effectively introduces an ongoing annual regulatory cycle for trusts.
More controlled deed amendments and trustee changes
The Bill proposes a more controlled process for trust deed amendments. An amendment will have to be lodged with the Master, and trustees may not act on it until the Master has acknowledged lodgment. Actions taken contrary to this requirement are proposed to be invalid.
Currently, a trust deed amendment can generally become effective upon execution, even if its lodgment with the Master occurs later.
Under the proposed Bill:
- the amendment must be lodged with the Master;
- the Master must acknowledge the lodgment;
- trustees may not act on the amendment before this has occurred; and
- actions taken contrary to this requirement are proposed to be invalid.
In addition, beneficial ownership information must be up to date before an amendment can be lodged. This will require a significant change to the way deed amendments are administered and tracked.
Resignation of trustees becomes more formal
Trustee resignations will also become more formal. A trustee’s resignation will no longer simply be a matter of giving notice; it will require notification to relevant parties, proof that the other trustees and vested-right beneficiaries have been informed, and written acknowledgement from the Master before the resignation becomes effective.
Importantly, a resigned trustee can remain liable for fiduciary failures occurring during his or her period of trusteeship.
This reinforces the need for trustees to ensure that their affairs are properly documented before resigning.
Termination of trusts changes
Under the proposed regime, termination will be linked to the removal of the trust’s name from the trust register.
This is noteworthy because the Bill apparently does not itself clearly establish the mechanism for
creation and maintenance of such a register — something that may warrant clarification during the comment process.
The Master as a more active regulator
The Bill gives the Master substantially greater powers and moves the office toward a more active regulatory role. These powers include
- greater oversight;
- compliance requirements;
- beneficial ownership monitoring;
- annual reporting;
- compliance notices;
- administrative penalties; and
- expanded enforcement powers.
This is probably one of the most consequential changes in practice.
Greater exposure for trustees
The Bill expands the range of offences and penalties that may apply to trustees. Potential contraventions include acting without proper authority, failing to maintain required records, submitting inaccurate beneficial ownership information, failing to maintain required trust account arrangements and failing to submit prescribed information.
Depending on the offence, sanctions can include financial penalties and potentially imprisonment.
Trustee compliance is therefore becoming more than an administrative function: it is a core fiduciary risk issue.
What trustees should do now
Although the Bill is still in the comment stage, trustees and trust administrators should start preparing for a more formal compliance environment.
A particularly important principle is that a trustee’s standard may be influenced by that person’s knowledge and expertise.
Consequently, a professional trustee who is, for example, an attorney, accountant, tax practitioner or professional fiduciary practitioner, may potentially be judged against a higher standard than an ordinary lay trustee.
For professional trustees, this is a very important risk consideration.
In conclusion
The Regulation of Trust Bill is open for comment until the 11th of September 2026.
However, the broader policy direction is clear: South African trusts are being moved toward greater transparency, and accountability. For trustees, the safest response is to treat the Bill not merely as a future legal development, but as an early warning to strengthen governance practices now.
Sentinel International will continue to provide updates and clarifications as received.
Should you however have any questions, please feel free to contact us at contact@sentinelinternational.co.za
Article by:
Werne Strydom, Head of Trusts