Trust Governance and Estate Planning: Why Regular Trust Reviews Matter

As trust compliance requirements continue to tighten in South Africa, trustees are expected to take a far more active role in managing and overseeing trust affairs. Independent trustees, in particular, carry significant responsibility when it comes to governance, record-keeping, and ensuring that trusts meet both SARS and Master’s Office requirements.

At the same time, trustees should regularly review whether their trust structure still aligns with their long-term estate planning and tax objectives, especially when considering factors such as Capital Gains Tax and Estate Duty.

Capital Gains Tax vs Estate Duty

Although Capital Gains Tax (CGT) rates have increased over time, trusts can still offer valuable estate planning benefits in certain circumstances.

When considering the potential impact of:

• Capital Gains Tax, and

• Estate Duty

The overall tax effect may, in some cases, balance out depending on the trust structure, asset profile and long-term estate planning objectives.

For this reason, trust structures should be reviewed regularly as part of a broader estate planning strategy to ensure they remain appropriate, tax-efficient, and aligned with the intended objectives.

Independent Trustees Carry Additional Responsibility

Independent trustees have increased accountability and oversight obligations.

In practice, independent trustees are often the individuals the Master’s Office may approach first when there are compliance concerns.

Trustees should:

• Ensure proper record-keeping

• Stay informed of reporting obligations

• Notify the Master of required changes

• Understand their fiduciary responsibilities fully

Many trusts are required by the Master’s Office to appoint an independent trustee, depending on the nature and structure of the trust. Given the increased focus on trust governance and compliance, it is important to seek professional guidance to ensure your trust remains compliant.

Final Thoughts

Trust compliance in South Africa is becoming increasingly stringent, and trustees are expected to maintain accurate, up-to-date records and disclosures at all times.

Now is a good time for trustees to review the following key areas:

• Current trust structure and compliance status

• Beneficiary records

• Loan accounts

• Beneficial ownership submissions

• SARS representative details

At My Finance Partner, we assist clients with trust compliance, tax submissions, and practical guidance to help reduce risk and stay compliant with SARS requirements.

If you need assistance reviewing your trust structure or ensuring your trust remains compliant, feel free to contact our team.