Trust termination calls for clarity

2018-09-12 06:01
Linki Scholtz

Linki Scholtz

Multimedia   ·   User Galleries   ·   News in Pictures Send us your pictures  ·  Send us your stories


I have established a family trust for estate planning purposes to make sure my children are looked after when I pass away.

I was wondering, though, if the trust can be terminated after my death, and if so, when? I would not like all my planning to be for nothing because the trust just ended.


In South African law one must distinguish between two general types of trusts, namely a testamentary trust (established in your will) and an inter vivos trust, established in terms of a trust deed. The latter type includes your family trust.

Both types of trust do not “die” or terminate because of disuse. In general a trust will continue to exist in perpetuity. This is supported by the fact that our Trust Property Control Act 57 of 1988 (“the Act”) which governs the operation of trusts in South Africa, does not explicitly provide for when and how a trust is terminated.

This said, it does not mean that a trust can never be terminated, as there are a number of events that can occur during the lifetime of the founder, the trustees or the beneficiaries of a trust which could provide for grounds for the termination of a trust.

When considering the termination of an inter vivos family trust, the first step will always be to turn to the provisions of the trust deed.

Often the trust deed will govern when the trust will or could be terminated. Some of the most common provisions to this effect encountered in trust deeds are:

  • It may terminate once all of the trust assets have been distributed to the beneficiaries.
  • It may terminate after a certain period of time or upon the happening of a specific event.
  • It may terminate at the discretion of the trustees or through a resolution passed by the beneficiaries.
  • It may terminate once its primary objective has been achieved.
  • It may terminate in the event that it becomes impossible to achieve its main objective.

In the event that the trustees or beneficiaries wish to terminate a trust pursuant to circumstances that are not provided for in the trust deed itself, another option available would be to approach the high court.

There could be a number of reasons why the termination of a trust may be justified, such as that it has become uneconomical to continue to manage the trust on behalf of the beneficiaries, or even that the relationship between the beneficiaries and the trustees have deteriorated to the point where management of the trust has become impossible.

For the termination of a trust, it is important that the assets be formally distributed to the beneficiaries in accordance with the trust deed. Once all liabilities have been settled and trust assets distributed to the beneficiaries, the trust can be considered terminated.

The trust is not upon termination simultaneously deregistered as well. Deregistration has to be applied for separately at the master’s office where the trust was first registered. The master will require a list of documentation to verify that the trust has indeed been terminated, after which the deregistration of the trust will be approved.

If you have a well-drafted trust deed that clearly provides for the grounds when the trust may be terminated, there should not be cause for concern.

If you are unsure about your trust deed’s termination provisions, consult your attorney or estate planner and discuss your trust deed and concerns you may have.

Linki Scholtz, candidate attorney, Phatshoane Henney Attorneys


Join the conversation! encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.

Inside News24

Traffic Alerts
There are new stories on the homepage. Click here to see them.


Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire network.


Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.