Current legislation regulating the function of trustees in the administration of trust property

Abstract

The main focus of this study is to assess how effective the current legislation is in regulating the trustees in the administration of trust property in South Africa in order to prevent maladministration and abuse of trusts. The administration of a trust revolves mainly around the trustees and the particular relationship between the trustees and the beneficiaries. The benefits of the trust can only be legitimately achieved if the trust is administrated properly. The Trust Property Control Act of 57 of 1988 was designed to regulate the administration of trusts by establishing firmer control and supervision over trustees in order to protect the trust beneficiaries. Unfortunately the Act failed to deal with many important aspects of trust administration and as a result the majority of problems associated with the administration of trusts still have to be addressed outside the ambit of the act, usually by applying common law principles. The Act is clearly ineffective in regulating the administration of trusts in that it is outdated (27 years old), very brief (only 27 sections) and therefore lacks comprehensive guidelines on how trustees should manage trust property. This has led to the extensive abuse of trusts by both the founder and trustees. This abuse however has been the subject of a number of court decisions since 1990. The courts have done an excellent job thus far but to ensure legal certainty the submission is that the current legislation should be amended to incorporate all aspects of trust law (common law, the Act and case law) into one single comprehensive legislation.