A Second Opinion

A platform dedicated to providing expert trust audit services
to ensure that your trust deed is up to date with the latest legislative changes.

Welcome to Second Opinion

Welcome to Second Opinion, a platform in collaboration with Trustees for the Future (Pty) Ltd dedicated to providing expert trust audit services to ensure that your trust deed is up to date with the latest legislative changes. We understand that trust deeds are complex legal documents, and it can be challenging to keep track of all the changes that occur over time. That’s why we’re here to help.

We believe that a Trust is like a car – both require regular maintenance and servicing to keep them running smoothly. Just as a car needs to be serviced to ensure it runs efficiently and safely, your Trust needs regular reviews to ensure it complies with the latest legislation and regulations. At Second Opinion, we provide the expert guidance and support you need to navigate the complex world of trusts and trusteeship.

Our team of experienced professionals is dedicated to helping you understand the intricacies of trust law, and we’ll work with you every step of the way to ensure that your trust deed is up to date and fully compliant. With our help, you can be confident that your trust is in good hands, and you can focus on navigating the route ahead.

“We believe that a Trust is like a car – both require regular maintenance and servicing to keep them running smoothly. Just as a car needs to be serviced to ensure it runs efficiently and safely, your Trust needs regular reviews to ensure it complies with the latest legislation and regulations. “

WHAT A SECOND OPINION DOES

What you can expect working with us, and why you should consider it. 

There are a few reasons that can possibly cause the invalidity of Trusts or which is responsible for a few grey areas in trust law in South Africa.

The first being the fact that South has a unique trust law system which is neither a pure English law trust nor a pure Roman-Dutch law trust, but a hybrid of the two systems. The second being the fact that Trusts in South Africa develop in case law, but this pace has been slow. For instance, first reported case on Trusts in South Africa is found in 1833, yet the argument on whether the trust figure is (or should be) a species of the Roman and Roman-Dutch law stipulatio alteri, only started in 1943 in CIR v Estate Crew 1943 AD, then it featured in our courts again in 1956 in Crookes v Watson, then only again in 1997 in Hofer v Kevitt and then another 8 years passed before Badenhorst v

Badenhorst in 2006 and then 6 years to Potgieter v Potgieter in 2011 and another 3 years to WT & Other v KT (933/2013) [2015] ZASCA 9 (13 March 2015). After all of these years, the matter is still not clear.

A third reason is that a Trust in South Africa is not a “creature of statute”, as the Trust Property Control Act, 1988 is outdated and totally inadequate in properly regulating the powers and duties of Trustees. South African trusts (as “creatures of document”) are therefore only as good as the Trust allows it to be.

Another important reason is the use of trust deed prescedents (and sometimes even precedents foreign to South Africa) to “copy and paste” the trust deed. Some precedents (particularly the Anglo-American precedents) have invalidating consequences as they, for instance, incorporate a general power of appointment to trustees or allow the Founder to unilaterally act to create the trust and one should be particularly aware of these.

Lastly but not least, some trust deed drafters also, sometimes unknowingly, include beneficiaries which were never intended to benefit under the trust.

One should carefully audit trust deeds for the following matters that can have an effect on the validity of the trust:

  1. Did the Founder express his/her intention (in a mode apt to create a legal obligation) to create a trust where the trust was not created by Court order?
  2. Is the trust property defined with reasonable certainty and did it indeed pass over from the Founder to the Trustees?
  3. Is/are the Beneficiary/Beneficiaries correctly identified or indentifiable so that the trust object is clear and in now way vague and also alligned with the purpose for which the trust was founded?
  4. Are the powers given to trustees specific and within the boundaries of a specific power of appointment?
  5. Are the powers, duties and obligations of the trustees properly described in such a manner that it creates certainty in no unclear manner so that there are no “grey areas” and the trustees can observe and interpret them correctly?

One must furthermore audit the “constitutive charter” of a trust/trust deeds to ensure compliance with and best possible structures for:

 

  1. Trustees to best apply the conduit-pipe principles for income, capital and capital gains;
  2. Clear definitions of words/concepts with due regard to the different interpretations of the same word in different acts;
  3. Correct wording to suffice and negate the effect of section 7C of the Income Tax Act 58 of 1962 (as amended);
  4. Ensure “roll-over” beneficiaries should the specifically named Beneficiary(ies) pass away and
  5. Other related matters.

HOW WILL YOU KNOW IF YOU NEED A SECOND OPINION

Answer the questions to the right – if any of the above is yes, please reach out to us and we will be able to assist you.

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1.

Does your current Trust Deed reserve certain rights for a person that is still alive? For example that right to stipulate in the Will how that Trust assets should be dealt with?

2.

Is there a provision in the Trust Deed that allows for the creation of further Trusts, if so does it allow the Trustees to create such a further Trust with provisions as what the Trustees deem fit?

3.

Does your Trust Deed allow you to credit distributions to a beneficiary in terms of a loan account?

4.

Does the Trust Deed given certain powers to Trustees in terms of the termination of a Trustees office?

HOW WILL YOU KNOW IF YOU NEED A SECOND OPINION

Answer the questions to the right – if any of the above is yes, please reach out to us and we will be able to assist you.

1.

Does your current Trust Deed reserve certain rights for a person that is still alive? For example that right to stipulate in the Will how that Trust assets should be dealt with?

2.

Is there a provision in the Trust Deed that allows for the creation of further Trusts, if so does it allow the Trustees to create such a further Trust with provisions as what the Trustees deem fit?

3.

Does your Trust Deed allow you to credit distributions to a beneficiary in terms of a loan account?

4.

Does the Trust Deed given certain powers to Trustees in terms of the termination of a Trustees office?

Contact Us

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