South Africa puts its 1988 trust law up for replacement, and trustees carry the load

South Africa published the draft Regulation of Trusts Bill, 2026 for comment on 7 August. It would repeal the Trust Property Control Act, 1988 on promulgation, replacing the statute that has governed South African trusts for 38 years.

Justice and Constitutional Development Minister Mmamoloko Kubayi set out the reasoning at a media briefing on 11 August, reported by SAnews. The 1988 Act has never been comprehensively reviewed, she said, while the environment in which South African trusts operate has changed considerably. The Bill targets trustees who evade accountability, limits on the Master of the High Court’s ability to supervise trusts, thin protection for beneficiaries and opacity around who controls trust property. Alignment with Financial Action Task Force recommendations runs through it. South Africa spent two years on the FATF grey list and the drafting reflects a determination not to return.

Submissions close on 11 September 2026.

What changes for a family trust

Writing for Werksmans Attorneys, tax director Ernest Mazansky worked through the provisions that matter to trustees, including trustees of family trusts. The Bill applies to all trusts: testamentary trusts, public benefit organisations and employee share incentive trusts included.

Three requirements stand out.

Trusts must prepare annual financial statements. Where a trust has not been doing so, it must start. No audit is required unless the trust deed demands one, but the Master may call for the statements. A separate annual return is also due, within six months of the anniversary of the first trustee’s authorisation, or within six months of commencement for trusts already in existence, on payment of a prescribed fee.

Amendments to a trust deed change status. At present an amendment takes effect on signature, whether or not it reaches the Master. Under the Bill, trustees may not act on an amendment until it has been lodged and the Master has acknowledged lodgement, and anything they do in contravention is invalid. An amendment can only be lodged if the trust’s beneficial ownership information is current. Given the delays that have affected the Master’s offices, Mazansky notes the improvement in allowing electronic lodgement, though a prescribed fee now applies.

Beneficial ownership registers must be updated within ten days of any change.

The independent trustee, and a definitional problem

The Master’s directive that new trusts should have an independent trustee is written into the Bill, with a definition: someone unrelated to the founder or the other trustees, with no personal interest in the trust property, able to exercise independent judgement. “Related” reaches two degrees of consanguinity or affinity, so grandparents, grandchildren, siblings, parents-in-law and stepchildren are all caught.

There is no general obligation to appoint one. The requirement bites where the Master steps in, which may happen when all the trustees are beneficiaries, all are related to each other and the trust trades with third parties. Werksmans includes an independent trustee in the deeds it drafts regardless.

Mazansky flags one drafting point worth watching. The definition of beneficial owner refers to a natural person who ultimately owns the relevant trust property. Outside a sham, he argues, no founder or beneficiary owns trust property; only trustees do. The wording sits awkwardly with the concept of a trust.

Clause 16 introduces a prudent investor standard with fifteen factors trustees must weigh, from diversification and liquidity to the trust’s tax position and the cost of investing. Clause 14 pulls the other way, granting trustees the powers of an absolute owner where the deed is silent.

Families with South African trusts have until 11 September to comment. Either way, the compliance burden on trustees is heading up, and existing deeds will need reading against the final text.

Sources: SAnews (11 August 2026); Werksmans Attorneys, Ernest Mazansky (14 August 2026).