Do all trustees require trustee bonds of security?
No, if trustees are exempt from furnishing security in the trust deed, they will not be required to source a bond through a bond provider.
What happens if a trustee named in the Letters of Authority resigns or dies – does this affect the security bond?
On the death or resignation of a trustee, the Letters of Authority must be returned to the Master for the name of the trustee concerned to be deleted. A written resignation by an outgoing trustee and a resolution by the remaining trustees accepting the resignation would be required by the Master and, in the case of a deceased trustee, a copy of the death certificate would have to be lodged. If security bonds were given to all named trustees an endorsement will have to be effected to the security bond to only reflect the remaining trustees names.
What else may I need to do if a replacement trustee has not been appointed by the Master and the Trust Deed specifies there must at all times be no less than a certain number of trustees?
An endorsement to the security bond will need to be effected to reflect the addition of the new trustee(s) for the Master to issue amended Letters of Authority. Until this is done, the remaining trustees do not have the capacity to enter into binding transactions on behalf of the trust and the surety will not be guaranteeing the performance of all appointees who are required to act together. The surety can only guarantee the performance of office holders/ appointees hence it is of extreme importance to notify the surety of any changes to the names and number of office holders.
Jacqui Smith (LLB)