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Validity of Trusts Questioned

A recent article in Moneyweb states that the validity of more than 85% of trusts on which legal audits have been conducted, can be questioned.

Prof Willie van der Westhuizen, head of trust law and estate planning at Millers Attorneys, says based on their own empirical studies and legal audits done on trusts deeds from all over South Africa for the past 15 years, there are various reasons for possible invalidity.

One potential example is where the trust deed was amended without the consent of the original beneficiaries if these beneficiaries have already accepted their benefits in terms of the trust in the past.

The fact that a trust deed is filed with the Master of the High Court does not mean it is valid because it is not the Master’s duty to check for validity, he says.

While there are various grey and rather technical areas in trust law that could result in possible invalidity, the most common other issues revolve around the formation of a trust with only oneself as a party to the contract, where the object of the trust is too vague or where the trustees exceeded their power of appointment.

Van der Westhuizen recently addressed these issues at a trust and taxation law seminar hosted by Citadel.

Please click here to read the full Moneyweb article.

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