Background:

In South African law, the role of a trustee in the administration of a trust carries significant legal responsibility and fiduciary obligations. However, the mere nomination or acceptance of the role of trustee does not automatically grant one the authority to act in that capacity. There is a clear legal process that governs when a trustee is officially recognised and, conversely, when a trustee is considered lawfully removed. Failure to comply with these processes can lead to serious legal consequences, not only for the trustees themselves but also for the trust and third parties who interact with it.

Legal framework:

A trustee is only legally recognised once they have been formally authorised in writing by the Master of the High Court (“Master”). This is in accordance with section 6(1) of the Trust Property Control Act 57 of 1988 (“Act”), which stipulates that no person shall act as a trustee without written authorisation from the Master. Even where a trust deed names a trustee, they cannot exercise any trustee powers until the Master issues them with Letters of Authority (“Letter”). The courts have consistently reinforced this principle. For instance, in Kropman NO v Nysschen 1999 (2) SA 567 (T), it was held that any actions taken by a person purporting to act as trustee before being formally authorised are invalid. This means that such person has no authority to bind the trust or act on its behalf, rendering any decisions or contracts entered into during that period potentially null and void.

Similarly, the removal of a trustee must also follow the legal procedures outlined in the Act and the common law. A trustee may be removed in two ways: either voluntarily or involuntarily. Voluntary removal often occurs through resignation. However, even where a trustee has submitted their resignation, it does not take effect until it has been formally accepted by the Master and the Letter have been amended accordingly. On the other hand, involuntary removal may be effected by the Master under section 20(1) of the Act, where grounds exist such as insolvency, mental incapacity, misconduct, or inability to perform trustee duties. In some cases, interested parties such as co-trustees or beneficiaries may approach the High Court to have a trustee removed for breach of fiduciary duty, conflict of interest, or mismanagement of trust property.

The legal implications of acting as a trustee without proper authority or failing to remove a trustee correctly are severe. Any act performed by a trustee before being authorised by the Master is unlawful and without effect. This includes signing contracts, transferring property, or making distributions to beneficiaries. Furthermore, such a person may be held personally liable for any loss or damage resulting from their unauthorised actions. This liability may extend to dealings with third parties who acted in good faith but suffered prejudice due to the lack of proper appointment.

Moreover, a trustee who has resigned but continues to act without formal removal and an amended Letter may expose the trust to reputational and legal risks. Similarly, a trust that continues to reflect a removed or deceased trustee on its official documentation may find its transactions questioned or challenged, particularly when dealing with financial institutions, the Deeds Office, or in litigation.

Given the importance of compliance with these legal formalities, it is essential that trust administrators and legal advisors ensure that all changes to the trusteeship of a trust are properly documented and promptly communicated to the Master. This includes submitting resignation letters, death certificates in the case of deceased trustees, and applications for the appointment of new trustees. Additionally, trustees should refrain from performing any actions until they have received written authority, and beneficiaries or stakeholders should verify that trustees are properly authorised before accepting decisions made in their name.

Concluding remarks:

The authority of a trustee is rooted in formal legal recognition, and their removal must similarly be effected through established legal procedures. Ignoring or bypassing these steps not only compromises the legality of trust operations but may lead to personal liability, invalid transactions, and costly disputes. Trustees and trust beneficiaries are therefore urged to ensure that appointments and resignations are handled with legal precision to preserve the integrity of the trust and to avoid unintended consequences.

VDMA’s team of experts is at your disposal for any assistance you or your business may require regarding the administration of trusts.

Published 1 July 2025