Trusts - Time for trustees to get serious

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BUSINESS NEWS - Following the arrival of the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act 22 of 2022 (“Amendment Act”), trustees are now required, more than ever, to take ownership of their roles and discharge their duties timeously and properly.

A trustee’s role is an active role requiring time and attention to the affairs of the trust.

Adopting a passive approach in respect of the trustee role, even if you are an independent trustee, could hold severe consequences, such as jail time and/or fines of up to R10 million.

Some of the main duties of trustees are:

Drafting of resolutions in respect of transactions concluded by the trust.
Holding an annual trustee meeting, with minutes, in which important decisions are made and agreed to by the trustees in relation to the financial statements, bank statements and activities of the trust.
Opening a bank account for the trust.
Registering the trust for Income Tax with SARS.
Submitting financial statements and tax returns to SARS.
Maintaining records of all FICA documentation of the trust and ensuring that the trust is compliant with the Financial Intelligence Centre Act 38 of 2001.
Maintaining all trust documentation, including an asset register, in safe custody for 5 years after termination of the trust.
Submitting Beneficial Ownership Registers of the trust, and updates thereof, to the Master of the High Court to ensure compliance with the Amendment Act.
Ensuring that the trust deed amendments, trustee amendments and beneficiary amendments are done in accordance with the trust deed and applicable legislation and are lodged with the Master of the High Court for approval.
If you have a family trust, ensure that you have appointed an independent trustee.

A trustee does not only have a fiduciary duty to act in the best interest of the beneficiaries, but also has statutory duties to administer a trust properly.

Do you have questions about a trust or duties of trustees? Talk to someone who speaks property, fluently.