When to act and when not to as a trustee
JOHANNESBURG –
The trustees are the custodians of the assets in a trust. The trustees act of behalf of the trust and, in their capacity as trustees, can bring and defend actions concerning the trust. That is why it is so important to understand when someone can act, and be held liable, as a trustee and when someone can no longer act, and be held liable, as trustee. Misconceptions regarding when one can and should act as trustee may result in invalidating trust actions and may even lead to abuse by dishonest trustees.
The trustees are the custodians of the assets in a trust. The trustees act of behalf of the trust and, in their capacity as trustees, can bring and defend actions concerning the trust. That is why it is so important to understand when someone can act, and be held liable, as a trustee and when someone can no longer act, and be held liable, as trustee. Misconceptions regarding when one can and should act as trustee may result in invalidating trust actions and may even lead to abuse by dishonest trustees.
The first important aspect to understand is that trustees have to be appointed or nominated in terms of the trust deed, accept their appointment, and be authorised by the Master of the High Court to act. A trustee acts in a fiduciary capacity the moment he/she is lawfully (therefore subject to the terms of the trust deed) appointed as trustee and he/she has accepted trusteeship (signed a J417 Master form). It is therefore not dependent on his/her authorisation by the Master of the High Court. An appointed, but unauthorised trustee, can therefore commit a breach of trust and can be sued in a personal capacity for breach.
When can a trustee act?
Source: iol.co.za
