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Being a trustee is a big deal

Cape Town - Thinking of taking on a trusteeship? If so, be aware that the management of a trust rests squarely on the shoulders of the appointed trustees.

Trusteeship involves a host of duties and responsibilities imposed by the Trust Property Control Act 57 of 1988, the common law and the provisions contained in the trust deed.  

Lately the industry has experienced an increase in court cases revolving around issues relating to trusts. 

In all of these, trustees' conduct in managing the trust assets came under scrutiny and served as one of the determining factors in reaching the outcome in the respective matters.
 
Being a trustee is a big deal - you cannot abdicate your responsibilities and duties through some form of exemption letter or cunning phrases used in the trust deed. 

It is therefore essential that every trustee understands their role and has a firm grip on the responsibilities and duties that go with trusteeship.

Here's what you're letting yourself in for

So what is it that you are responsible for?

Trustees have a fiduciary duty to control the trust assets and to manage them in the best interest of the trust beneficiaries. 

Trustees are expected to act with the care, diligence and skill which can reasonably be expected of a person who manages the affairs of another. 

In other words, as a trustee you are expected to manage and protect the trust assets better, wiser and more productively than what you would have done, had they been your own!

Trustees have the duty to observe the terms of the trust deed. This means that you need a full understanding of the provisions contained in the trust deed. 

Decision-making can only take place after consideration of all the relevant facts, and decisions have to be recorded. Trustees are prohibited from acting if they are under undue influence of any other person when exercising their discretion. 
  
The trust property must always be kept separate; the trust must have a bank account and when the trustees invest the trust assets, they should avoid unnecessary risks. 

Trustees may furthermore only act within the powers inferred on them and need to ensure that proper controls are in place to protect and preserve the assets.   

The above list is not even an exhaustive one - there are quite a number of other duties that are equally important but have not been mentioned.

From the above it is clear that trusteeship entails major responsibility, commitment and a certain level of skills and expertise. 

FNB Premium accepts appointment as trustee and will assist you to ensure that your trust is managed in accordance with applicable legislation, and that management of the trust assets happens within the scope of the provisions of the trust deed.

If you are unsure whether you truly fulfill all your duties and responsibilities as a trustee, contact a Fiduciary Specialist at FNB Premium for assistance.

 - Fin24

*FNB is the sponsor of the Savings Issue.

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