Trusts must be registered with the Master in whose area of jurisdiction the greatest portion of the trust assets are situated. If more than one Master has jurisdiction over the trust assets, the Master in whose office the trust was first registered will continue to have jurisdiction.
What does the Trust Property Control Act say about the deregistration of trusts?
There is no provision in the Trust Property Control Act 57 of 1998 that requires the deregistration of trusts. Deregistration is an internal administrative action to facilitate the management of trust files in the Masters’ office.
Does the Master require confirmation that a trust has been deregistered?
Yes, as the Master registers all trusts, the Master also requires confirmation that a trust has been terminated.
Why would a trust be terminated and then deregistered?
A trust may be terminated by operation of law, by fulfilment of the trust’s objectives, due to destruction of trust property or by the renunciation of the trust by the beneficiary.
What happens when a trust is terminated?
The Master will have to deregister the trust. In order to do this, he will call for certain documentation from the trustee(s) whereafter he will close his file.
What documents does the Master need to deregister the trust and close his file?
The Master will request the following documents from the trustees:
- Reasons for terminating the trust, the original signed resolution by the trustees terminating the trust which must contain the following information about the trust:
- (i) whether the trust was dormant or active;
- (ii) whether a bank account was opened in the name of the trust and if so, that the bank account has been closed.
- The original letter of authority;
- Bank statement of the trust reflecting a nil balance; or the final statement prior to closing the bank account, or a letter from the bank confirming closure of the trust’s bank account;
- Proof that the beneficiaries have received their benefits; and
- An affidavit from the trustees confirming that the trust has been divested of all assets.
Once the Master has confirmed the deregistration of the trust and informed the trustees that his file is closed, the Master must direct the attention of the trustees to the provisions of Section 17 of Trust Property Control Act 57 of 1998 which states:
‘A trustee shall not without the written consent of the Master destroy any document which serves as proof of the investment, safe custody, control, administration, alienation or distribution of trust property before the expiry of a period of five years from the termination of a trust.’
What information does the Insurer need to process the deregistration of the trust and make the bond inactive.
- Notice of deregistration
- If letter of authority has been returned to the Master
According to the trustee’s facility application with the Insurer, the trustee is to fully inform the Insurer of what is being done in each trust as if the Insurer were in a similar position to the Master of the High Court, or any beneficiary.
- bank statement(s)
The Insurer shall have the same rights as the Master to information from the trustee(s) in regard to banking accounts and investments that the trustee possesses or is able to obtain and it may examine all vouchers in relation thereto whether in the trustee’s or agents possession, or the possession of the any banking institution, as the case may be.
Contact Shackleton Risk Management for more information.
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