You have been made a trustee of an inter vivos trust (created during the lifetime of the founder), and the Master of the High Court has accepted your appointment. What exactly does it mean? What do you have to do? Here are some guidelines:
The golden rule is that you must act in the best interests of the beneficiaries, both present and future. According to the Trust Property Control Act 57/1988 a higher standard of care than normal is expected of you, since you manage the affairs of somebody else. In doing this you will:
- Have a trustee meeting at least once a year to discuss matters and finalise financial statements (nowadays electronic meetings are also possible, but bear in mind that they must comply with the Electronic Communications and Transactions Act 25/2002);
- Know what the trust deed says about the way in which meetings are to be held, what the quorum is and what happens if a deadlock situation occurs;
- Fulfil one of your most important duties, namely to ensure that accurate records are kept of all financial matters, as well as of meetings;
- Be able to supply proof of separation between your personal assets and those of the trust;
- Never act with your personal gain in mind;
- Take proper care of the assets and guard them against any form of bribery;
- Ensure that the assets are managed fairly and transparently;
- Always be impartial;
- Not be manipulated by any co-trustee;
- Keep the documentation in a safe place for five years after the trust has been terminated.
If you make all decisions about the trust’s investments, income management and asset distribution with these guidelines in mind, your life as trustee should be uncomplicated and not influenced by any other consideration than what is best for the beneficiaries.