If you plan to form a trust, you need to know about a new directive from the Chief Master of the High Court to all Master’s Offices in the country.
The directive applies to all new trusts (those “registered for the first time”) by the Master.
Following a series of court cases in which the “trust form” was held to have been abused by the trustees (often in the form of trustees treating trust assets as their own), and in particular a 2004 Supreme Court of Appeal decision suggesting the appointment of independent outsiders as trustees in certain family trusts, the Chief Master has directed that Masters “must consider appointing” an independent trustee where any new trust is a “family business trust”.
“Family business trust” is defined as having “the following combined characteristics:
Note: There appears to be no requirement that the trust actually trades as a “business”.
“Independent trustee” is described (in summary – the actual list is a long one), as follows –
The Master can elect not to appoint an independent trustee in certain circumstances, either on the basis of good cause shown, or subject to the lodging of security, or subject to appointment of an auditor to produce annual audited financial statements under an instruction “to inform the Master when potential harm to creditors is likely.”
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)