❤We hope that you enjoyed Valentine’s Day with your loved ones and that special memories were made!❤
 

The administration of a deceased estate is a time-consuming process. Depending on the unique circumstances of each estate, the process can not only be lengthy but also complicated. Unfortunately, further delays may be caused because of the reliance on various outside service providers, which form an integral part of every estate.
 
At EFBOE, our control over the circumstances listed below is limited. But, despite all the complications and delays encountered during the estate administration process, it remains our goal to provide efficient and timeous service to our clients. Our primary goal is to conclude the administration of a deceased estate as soon and as effectively as possible, to enable loved ones to carry on with their lives after the deceased’s passing.
 
This month we would like to mention various factors that may have a substantial impact on the timeline of the administration process. These factors include:
 

Master’s Offices:

Financial institutions:

The South African Revenue Services (SARS):

Insurance companies:

Duplicate vehicle registration documents:

“To lose patience is to lose the battle.”
Mahatma Ghandhi
“Patience is not simply the ability to wait- it’s how we behave while we’re waiting.”
Joyce Meyer
“The strongest of all warriors are these two – Time and Patience.”
Leo Tolstoy

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Historically, in terms of our common law, in the absence of a provision in the trust instrument, trustees were not entitled to resign from their office except if they gave good reason and obtained the consent of a court (as confirmed in the Meijer v FirstRand Bank Limited case of 2013). However, with the promulgation of the Trust Property Control Act in June 1988, effective from 31 March 1989, Section 21 was introduced to allow a trustee to resign at any time by providing written notice to the Master of the High Court and the ascertainable beneficiaries, irrespective of whether the trust instrument allows for it or not.
 
Section 21 of the Act allows trustees to “resign by notice in writing to the Master and the ascertained beneficiaries who have legal capacity”. This, generally, refers to beneficiaries with vested rights who are over the age of 18 years, free of mental illness and who are known to the trustee.
 
A beneficiary obtains a vested right in an asset and/or income and/or capital gains in a trust, either in terms of the provisions of the trust instrument (called a “vesting trust”), or through the trustees exercising their discretion, but always subject to the rights attached to such a vested right.
 
It is also good practice to provide written notice to the guardians in the case of minor beneficiaries, or to the tutors or to the curators of the beneficiaries of the trust.
 
Whom to inform
In practice, many resigning trustees are not aware that they should inform the ascertainable beneficiaries, making any attempted resignation invalid. With charitable trusts, it is particularly difficult to meet this requirement and may invalidate the resignation in law. No trust instrument can make the procedure to resign easier.
 
Note that it is not a requirement of the Trust Property Control Act for a trustee to inform the remaining trustees of their resignation. It may, therefore, be good practice to provide for this requirement in the trust instrument.
 
Can a trustee’s resignation be refused?
Neither the founder nor the other trustees can refuse a trustee’s resignation. Neither the court nor the Master can refuse the resignation of a trustee either (Meijer v FirstRand Bank Limited case of 2013).
 
Documents to submit
When a trustee resigns, the Master requires the original Letters of Authority (or an affidavit from a trustee stating that the original Letters of Authority document has been misplaced and that, should it be found in the future, the trustees will hand it to the Master), the resignation letter, and a resolution by the remaining trustees accepting the resignation.
 
Alternatively, a trustee may submit their resignation to the Master and the beneficiaries known to the trustee, and request the Master to contact the remaining trustees to appoint a replacement trustee, if that is required.
 
The effective date of removal when accountability ceases
Generally speaking, resigning trustees should remember that they will be held accountable as trustees for the period that they served as trustees until such time as the Master issues new Letters of Authority removing them.
 
The exiting trustee will be bound by all of the relevant statutory and common law duties until such time of their removal and should, therefore, participate in trustee activities until the issuance of new Letters of Authority.
 
It is, therefore, important for the remaining trustees to obtain the new Letters of Authority from the Master of the High Court confirming the removal of the exiting trustee, since any decision taken by the remaining trustees before the actual removal of the exiting trustee by the Master of the High Court will be null and void.
 
As long as the Act’s requirements (as discussed) are met, it may be practical, when considering potential long delays at the Master’s Office, to make allowance in the trust instrument for the effective removal of a trustee upon their written resignation and upon receipt of proof that the resignation has been lodged with the Master (such as a Master stamped submission), subject to there being at least one remaining trustee (Meijer v FirstRand Bank Limited case of 2013).
 
The courts will, however, not allow any abuse by a majority of trustees to remove a minority trustee from office in such a manner (Du Plessis v Van Niekerk case of 2018).
 
Conclusion
It is advisable to include sufficient detail in the trust instrument regarding the estate planner’s personal wishes to deal with the resignation of trustees, as well as to consider and to adhere to the requirements of Section 21 of the Trust Property Control Act.
 
If there is a breach by another trustee before a trustee, who was planning to resign, is removed by the Master, then it is no defence for such a trustee to argue that they attempted to resign. Such a person may still be held jointly and severally liable for a breach of trust by another trustee. This means that damages may be recovered from a single trustee, more than one trustee, or all of the trustees.
 
*Phia van der Spuy is a Chartered Accountant with a Master’s Degree in Tax. She is a registered Fiduciary Practitioner of South Africa, a Chartered Tax Advisor, a Trust and Estate Practitioner, and the Founder of Trusteeze, a digital trust solution provider.

“To deny people their human rights is to challenge their very humanity.”
Nelson Mandela

On Tuesday, 21 March 2023, South Africa will be celebrating Human Rights Day. We will commemorate the history of the achievement of some of the rights that we enjoy today, e.g. the right to vote.
 
Every constitution around the world provides for fundamental rights, which are deemed inalienable. This refers to something that is not transferable or that is impossible to take away. According to the Bill of Rights, as enshrined in the Constitution of the Republic of South Africa, each citizen has among others, the inalienable right to life, equality, human dignity, and privacy.
 
Natural rights are those that a person is born with, for instance the right to life. Rights to life, freedom of thought, and equality before the law were developed as both natural and inalienable rights. That is, by birth they belong to each human being until their death and can, as such, not be taken away.
 
In celebrating Human Rights Day, we cherish the freedoms that we enjoy, knowing from past experience how easily people’s rights and freedoms can be stripped away. Our human rights should be treasured at all cost!

The Let’s Talk EFBOE Team