What are the legal requirements to deregister a Trust?
Termination
of a trust can occur through various means, such as legal operation,
achievement of trust objectives, destruction of trust property, or beneficiary
renunciation. Regardless of whether it is an inter vivos or testamentary trust,
it is crucial to review the trust deed, including any amendments, as it
typically outlines provisions for deregistration and termination, along with
the specific process and conditions involved.
Before
proceeding with deregistration, trustees must settle all financial obligations,
including outstanding taxes, debts, or liabilities. Additionally, they must
obtain any necessary tax clearances. Furthermore, beneficiaries must receive
their entitled benefits or provide consent for the termination and
deregistration to proceed.
What happens when a trust is terminated?
The
Master will undertake the deregistration process, which involves requesting
specific documentation from the trustee(s). Once the required documents are
submitted, the Master will close the trust file.
What documents will the Master need
to deregister the Trust?
To
facilitate the deregistration of a trust, the following documents are typically
required by the Master:
1. An
originally signed resolution by the trustees, outlining key information about
the trust:
a) Indicate whether
the trust was dormant or active.
b) Confirm
distribution of trust assets to beneficiaries.
c) Affirm that all
trust assets have been divested.
d) Specify if the
trust terminated after a certain period or upon the occurrence of a specific
event.
e) Declare
achievement of the primary objective or the impossibility of its attainment.
f) Confirm closure of
any bank account held in the trust's name, if applicable.
2.
The original letter of authority.
3.
A bank statement reflecting a nil
balance for the trust, the final statement before account closure, or a closure
confirmation letter from the bank.
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 termination of a trust.”
