I have been working with trusts and trustees since 2001, and what struck me about my interactions with trustees was that many had a limited understanding of how trusts work and what their responsibilities entail. Upon investigation, I discovered that there was very little easy-to-understand education available for them, making their already complicated job substantially more difficult. When individuals were appointed as trustees, seldom would they be educated on the roles and responsibilities they were expected to fulfil.
Being appointed a trustee is an honour and a privilege, but it’s also a huge responsibility to ensure the trust you look after is in full accordance with legislation and common law.
The governance of a trust is completely in the hands of its’ trustees. All assets, liabilities, rights, and duties of the trust reside in the trustees and therefore the appointment as a trustee is a position that comes with a substantial amount of responsibility. It should therefore not be taken lightly.
When accepting an appointment as a trustee, you assume the responsibility of ensuring the proper management and administration of the trust for the benefit of the beneficiaries.
Trustee duties can be categorised into three types of duties – Fiduciary, Common Law, and Statutory Law.
Fiduciary duties refer to the ethical duties expected of trustees. An important aspect of a trustees’ duties is its fiduciary character. A trustee is legally and morally bound to manage the trust property responsibly and productively and is under an absolute obligation to act solely for the benefit of the trust’s beneficiaries.
Common law duties
Common law duties refer to the duty and care with which trustees handle the trust and trust property.
Statutory law duties
Trustees need to familiarise themselves with the legal duties imposed on them. These legal duties are dictated by several acts, including:
- Income Tax Act (ITA)
- National Credit Act (NCR)
- Tax Administration Act (TAA)
- The Trust Property Control Act
- Financial Intelligence Centre Act (FICA)
- Financial Advisory and Intermediaries Services Act (FIAS)
For more assistance with your trust affairs please feel free to reach out to me.