MONEY CLINIC | How do I remove a trustee from a business trust?

play article
Subscribers can listen to this article
It is important to look at the trust deed first to establish if exit strategies have been put in place.
It is important to look at the trust deed first to establish if exit strategies have been put in place.
wera Rodsawang/ Getty

Ever wondered how to go about removing a trustee from a business trust when issues arise?

Charles de Meillon, candidate attorney at commercial law firm Gillan & Veldhuizen Inc. looks at a few options:

Trusts have been used for many years to protect the assets of their beneficiaries - a legal arrangement designed to hold and manage assets overseen by appointed trustees. A business trust requires that a trustee does more than just protect and administer the trust property and requires that they also use these assets to further the aims of the trust, generate a profit and provide additional benefit to the beneficiaries.

But what happens when trust issues arise? 

There may come a time where beneficiaries believe that a trustee/trustees, for various reasons, are not fulfilling their fiduciary duties. It is important to look at the trust deed first to establish if exit strategies have been put in place but where serious disputes do arise and settlement negotiations fail or where a trustee refuses to resign, there may be no other alternative than the forcible removal of the trustee.  

There are several remedies for removing trustees from a business trust, assuming they fall within the regulations contained in the Trust Property Control Act 57 of 1988 and that the removal of trustee(s) will ultimately be in the best interests of the trust and its beneficiaries.  

In terms of the Act, Section 20 a trustee may be removed by a competent court on application by the Master of the High Court or another person who has a vested interest in the trust property (i.e. a beneficiary) if any of the following circumstances are present: 

  • If the trustee fails to perform satisfactorily any duty imposed upon him/her by or under this Act or comply with any lawful request by the Master,
  • if the trustee has been convicted in the Republic or elsewhere of any offence of which dishonesty is an element or of any other offence for which he/she has been sentenced to imprisonment without the option of a fine,
    • the above embodies similar requirements for the removal of a director of a company in terms of the 2008 Companies Act,
  • if the trustee fails to give security or additional security, to the satisfaction of the Master within two months after having been requested or within such further period as is allowed by the Master, or
  • upon sequestration or liquidation of their estate of the trustee,
  • if the trustee has been declared to be mentally ill or incapable of managing his/her own affairs or if, by virtue of the Mental Health Act, 1973 (Act No. 18 of 1973), is detained as a patient in an institution,
  • if the best interests of the trust and its beneficiaries have not been met. 

Further to these statutory requirements, the trust deed can stipulate other more stringent conditions or circumstances where a trustee may be removed and it is therefore important when creating a trust to consider a wide variety of potential solutions that are available to protect the beneficiaries and the ability of the trust to give effect to its purpose. It would also be wise to include a dispute resolution mechanism i.e. mediation / arbitration in the trust deed that disaffected parties can rely on.

De Meillon recommends seeking legal advice when preparing your trust deed and certainly before pursuing any action to initiate the removal of trustees.

Questions may be edited for brevity and clarity.

  • Have a money problem that needs solving? Fin24 can help! Send your question to

Disclaimer: Fin24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers. Under the ECT Act and to the fullest extent possible under the applicable law, Fin24 disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site in any manner.

Get the biggest business stories emailed to you every weekday.

Go to the Fin24 front page.

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For 14 free days, you can have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today. Thereafter you will be billed R75 per month. You can cancel anytime and if you cancel within 14 days you won't be billed. 
Subscribe to News24
Rand - Dollar
Rand - Pound
Rand - Euro
Rand - Aus dollar
Rand - Yen
Brent Crude
Top 40
All Share
Resource 10
Industrial 25
Financial 15
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot