Page 27 - Nexia SAB&T Trust Guide 2022

must be available for inspection by any trustee or beneficiary. The trustees are
responsible for producing annual financial statements. A trust does not require an
audit, unless the Master of the High Court or the beneficiaries request it, or should
the trust deed contain a provision requiring an audit.
Asset Register – maintain an asset register for the trust.
The Independent Trustee
The way in which the trust deed is drafted is important, and also the way in which
the trust and the trust assets are administered.
It is an abuse of a trust where a person creates a trust, transfers assets to the trust,
and then treats the trust assets as though they were his own. The appointment of a
truly independent trustee is a true reflection of a founder’s intention to create a valid
trust. It is thus advisable that at least three trustees, one of whom is completely
independent, are appointed to act as such, so that the founder (who may be a
trustee and a beneficiary) will have a minority vote.
In Land and Agricultural Bank of South Africa v Parker (2005), the Court
suggested that each family trust should appoint an independent trustee. And in
March 2017, the Chief Master issued a directive which sets the requirement for the
appointment of an independent trustee for all trusts which are defined as “family
business trusts”.
This is typically a trust set up for the protection of family assets, where the
trustees are all beneficiaries, and they are all related. If no independent trustee is
appointed for such a family business trust, the Master of the High Court will refuse
the registration of the trust.
The Master requires the independent trustee to sign a Sworn Affidavit upon his
appointment. The Affidavit requires such a person to declare, under oath, that:
1. He has no family relation or connection, blood or other, to any of the existing
or proposed trustees, beneficiaries or founder of the trust.
2. That he is competent to scrutinise and check the conduct of the other appointed
trustees who lack a sufficiently independent interest in the observance of
substantive and procedural requirements arising from the trust instrument.
3. That he has no reason to conclude or approve transactions that may prove to
be invalid, because he is knowledgeable in the law of trusts.
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