The Regulation of Trusts Bill would do more than expand trustees’ routine reporting, record-keeping, and investment duties. It would place the requirements for creating a valid trust on a statutory footing, strengthen the Master of the High Court’s oversight powers, and introduce measures intended to protect beneficiaries from mismanagement and abuse.
The first article in this two-part guide examined the provisions affecting trustees’ routine administration of trusts. This second article considers the Bill’s broader structural, regulatory, and protective provisions.
Justice and Constitutional Development Minister Mmamoloko Kubayi said on 11 August 2026 that the Trust Property Control Act has not undergone a comprehensive review since it was enacted, although the socio-economic, legal, and practical environment in which trusts operate had changed significantly.
According to Kubayi, shortcomings in the existing legislation enable trustees to evade accountability, constrain the Master of the High Court’s ability to exercise effective oversight, and leave beneficiaries without adequate protection.
She said a lack of transparency in the management and control of trust property also creates an environment conducive to money laundering and other criminal activities. The Bill is intended to address these weaknesses and align trust regulation with the recommendations of the Financial Action Task Force “without imposing unnecessary regulatory burdens”, Kubayi said.
Trust validity would be placed on a statutory footing
Clause 4 of the Bill would place the requirements for creating a trust on a statutory footing. A founder would have to indicate clearly and with reasonable certainty an intention to create a trust, identify the trust property, identify the beneficiaries or classes of beneficiaries or the trust’s object, and appoint a trustee or provide for one to be appointed. The trust’s object would have to be lawful.
The clause would also prohibit a sole trustee from being the sole beneficiary.
If a court found that these requirements had not been met, it would have to declare the trust invalid, either from its inception or from the date on which the relevant non-compliance began. The court could make any further order it considered appropriate to give effect to the declaration.
In the case of a trust created by court order, the order would constitute the trust instrument and would be regarded as fulfilling the functions of the founder for purposes of the statutory requirements.
New protections for vulnerable beneficiaries
Clause 3(1) would impose conditions on trusts created to protect damages awarded in motor-vehicle accident, medical-negligence, or related matters to a child or a person whom a court believes may be unable to manage the funds.
Under the Bill, such a trust could be created only if a curator ad litem had been appointed for the child or person during the proceedings and had submitted a report recommending a trust as an appropriate mechanism to protect the funds.
The court would also have to be satisfied that the trust was appropriate, that the interests of the child or person were adequately protected in the draft trust instrument, and that the instrument contained no provision that might be detrimental to them.
The draft trust instrument would have to provide for trustee remuneration, and the court would have to be satisfied that the factors in clause 24(3) had been considered when the remuneration was determined. These include the size and nature of the trust property, the time and skill required, the difficulty of the trustee’s tasks, and comparable charges.
Kubayi said legal practitioners commonly ask courts to order the creation of trusts to administer damages awarded to children or people with mental disabilities. She said there have been reports of trustees misappropriating these funds through excessive fees, improper investments, or outright misuse.
Property received by communities from the State
Clause 3(2) would introduce a separate prohibition on creating a trust to administer property received by a community from the State under an agreement or legislation.
The prohibition would apply to property received by a community from the State, rather than only to land. Under the transitional provision in clause 38(2), existing trusts holding such property would continue until dealt with under the relevant legislation.
Kubayi said the Master’s Office had received complaints from beneficiaries of trusts used to hold and manage land received through land-reform programmes. The complaints concerned alleged mismanagement and misappropriation of trust property. She said the Master could offer only limited assistance because of the scope of the Trust Property Control Act and the nature of the trusts.
Master could appoint an independent trustee in specified circumstances
Clause 10 would introduce a specifically framed power for the Master to appoint an independent trustee, although it would not require every trust to have one.
The power would apply where all the trustees were beneficiaries, all were related to one another, and the trust carried on business or trading activities with third parties that gave rise to obligations to those parties. The Master could exercise the power where this was necessary to ensure the separation of control and enjoyment of trust property, after consulting the trustees and beneficiaries with vested rights.
Clause 1 defines an independent trustee as a person who:
- is not related to the founder of the trust or to any other trustee;
- accepts office as a trustee to ensure that the trust is administered properly and in accordance with the trust instrument; and
- has no personal interest in the trust property and is able to exercise independent judgment in overseeing the administration of the trust.
Clause 2 provides that a person is related to another person when they are:
- married or live together in a relationship similar to a marriage; or
- separated by not more than two degrees of natural or adopted consanguinity or affinity.
According to Ernest Mazansky, a director at Werksmans Tax, two degrees of consanguinity would include a person’s parents and grandparents, children and grandchildren, and siblings. He says persons related by affinity would include, apart from a spouse, the spouse’s parents and siblings, as well as a stepchild.
More grounds for removing trustees
The Trust Property Control Act allows the Master to remove a trustee in specified circumstances, including sequestration or liquidation, failure to provide security, incapacity, and failure to perform statutory duties.
Clause 26 would retain and expand the removal provisions. The Master could remove a trustee whose estate had been placed under business rescue or administration under the Magistrates’ Courts Act, or who had been placed under debt review under the National Credit Act.
The Master could also remove a trustee who failed to perform satisfactorily a duty imposed under the proposed legislation, comply with its requirements, or comply with a lawful request from the Master.
Removal for failure to comply with the beneficial-ownership requirements could have wider consequences. Under clause 9(1)(e), a person removed from office on that ground would be disqualified from being authorised to act as a trustee.
The Master’s accounting and investigation powers
The current Act permits the Master to require a trustee to account for the administration and disposal of trust property, deliver relevant documents, and answer questions. It also allows the Master to appoint a fit-and-proper person to investigate a trustee’s administration of trust property.
Clause 12 would retain and elaborate on these powers.
An investigation could follow the Master’s consideration of a trustee’s account or the trustee’s failure to provide one. Where the trustee failed to comply with a written request from the Master, the investigation could be initiated by the Master or following a request from the founder, a beneficiary with a vested right, another trustee, or another party with a vested interest in the trust property.
Investigation costs would ordinarily be paid from the trust’s income or property. The Master could direct the trustee to pay the costs if the findings indicated that the trustee had failed to discharge their fiduciary duty. Suspected criminal conduct would have to be reported to the Provincial Section Head of the Commercial Branch of the South African Police Service.
Where an investigation followed a request from the founder, a beneficiary with a vested right, another trustee, or another party with a vested interest in the trust property, the Master could require the requesting party to provide security for the costs. The Master could direct that party to pay the costs if the investigation found that the trustee had discharged their fiduciary duty properly.
The Bill would not retain the current general court-remedy provision
Section 23 of the Trust Property Control Act allows a person aggrieved by the authorisation, appointment or removal of a trustee, or by a decision, order, or direction of the Master to apply to court for relief. The court may consider the merits, receive evidence, and make any order it considers appropriate.
The Bill contains no equivalent general statutory provision. It would allow a trustee to appeal an administrative fine to the Director-General of the Department of Justice and Constitutional Development within 30 days, but clause 34(7) describes the Director-General’s decision as final.
The absence of an equivalent to section 23 would remove the current Act’s express route for a merits-based court challenge. It would not necessarily exclude judicial review under generally applicable constitutional and administrative law.
Termination would be tied to removal from the trusts register
Clause 28 would change the legal point at which a trust terminates.
A trustee would have to notify the Master, in writing, when the trust terminates, and the Master would record the termination and remove the trust’s name from the trusts register. Under clause 28(2), the trust would terminate on the date its name was removed from the register.
Mazansky notes that the Bill does not expressly establish the general trusts register referred to in this clause. The provision also appears circular because notification would be required when the trust terminates, although the following subsection ties termination to removal from the register.
Existing trusts would generally be carried into the new regime
The repeal of the Trust Property Control Act would not, by itself, require existing trusts to be re-registered.
Under clause 38, anything done under the repealed Act that could have been done under the proposed legislation would be regarded as having been done under the corresponding provision of the new Act. Existing regulations would also remain in force until amended or repealed.
The transitional provision would therefore generally preserve valid steps taken under the current Act where they corresponded with steps that could be taken under the proposed legislation.
Bill remains open for comment
Taken together, these provisions would regulate more closely the creation of trusts, the eligibility and removal of trustees, and the Master’s supervision of trust administration. They would also introduce additional safeguards where trusts are created to protect damages awarded to vulnerable beneficiaries or to administer property received by communities from the State.
The Bill would give the Master more specifically framed powers to intervene in trust governance and investigate trustees. At the same time, it would not retain the current Act’s express general route for challenging the Master’s decisions in court on their merits.
The proposed termination mechanism and the relationship between some of the Bill’s provisions may require clarification during the legislative process.
The Bill remains proposed legislation and may change during the legislative process. Public comments are due by 11 September 2026. If enacted, it would repeal the Trust Property Control Act under clause 37 and would come into operation on a date determined by the President by proclamation in the Government Gazette under clause 39.
