09 July 2015 |  by Chamonie Buys
We are often approached by trustees of existing inter vivos (living) Trusts for purposes of reviewing the Trusts from a compliance point of view. This entails a thorough review of the Trust Deed to ensure that the Deed complies with ever-changing Trust principles and a review of all transactions to ensure each transaction is backed by a resolution signed by all trustees before the event.
You, as a trustee, have the duty to ask these questions about the Trust:
- Is the purpose for which the Trust was established clear?
- When was the Trust registered and when last was the Deed of Trust reviewed?
- Is there an independent trustee appointed?
- Does the Deed clearly identify the beneficiaries?
- Has provision been made in the Deed to ensure succession of beneficiaries?
- Does the Trust operate a bank account in its name as prescribed in Section 10 of the Trust Property Control Act?
- Is the Trust registered for income tax purposes with the South African Revenue Service?
- Are all trustees consulted when a decision is made and are decisions recorded in writing by way of resolutions?
- Are proper books of account and financial records kept by the trustees and are annual financial statements compiled?
- Does the Deed prescribe that the Trust’s financials be audited or does the trustees have a discretion?
- What does the Deed say about the trustees’ power to amend the Deed?
- What does the Deed say about the termination of the Trust?
- Does the Deed confer “special” powers to the Founder/Donor or any one of the trustees, such as a veto right or the sole right to appoint or dismiss a trustee, amend the Deed or dispose of assets held by the Trust?
- Does the Deed contain a testamentary provision?
If you are unable to answer any of the questions or your answer to the majority of the questions is “NO”, come and speak to us, we can assist to give you peace of mind.