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SIMON BROWN: I’m chatting with Mbonisi Ndlovu, partner at Citadel Fiduciary. Mbonisi, appreciate the time today. The proposed Regulation of Trusts Bill 2026 [has] some perhaps significant changes for trusts. My sense around it is maybe four sort of professional trustees is less of an issue. A lot of this is around how processes are managed.
MBONISI NDLOVU: You are correct, Simon. In past years, since 1988, trusts have been regulated by what we call the Trust Property Control Act. We are now moving to a different dispensation.
This Regulation of Trusts Bill proposes a different way of operating. This whole proposed bill doesn’t do away with the reason for the existence of trusts; it’s purely there to ensure that there’s greater governance and transparency and accountability for trusts, just to regularise that whole process.
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SIMON BROWN: That’s an important point you made there. This is not doing away with trusts, it’s not changing tax rules or anything. It’s actually just making them, truthfully, a more efficient and more productive vehicle for many purposes – often cases of estate planning.
MBONISI NDLOVU: That is very much correct. So essentially, most people – such as your beneficiaries of the trust – will enjoy more transparency as to what the trust actually entails.
And then for trustees themselves, they now pretty much have a higher standard compared to the current dispensation, which is regulated by the Trust Property Control Act.
So now there’s a higher threshold and enhanced supervisory role that the Master of the High Court now plays with regard to how trusts are basically administered by trustees.
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SIMON BROWN: I want to come in a bunch more to the Master of the High Court. For those who are beneficiaries, again this is the good news. This is better transparency, this is better oversight, this is better reporting. In many senses, it’s kind of bringing the 1988 law into modern times.
MBONISI NDLOVU: That is correct. So now, when I speak about beneficiaries, it’s transparency there – often vulnerable beneficiaries such as children, because when we establish trusts for vulnerable groups such as children, people living with disabilities, those people cannot necessarily speak out for themselves.
Someone has to protect their interests, which is what this bill is trying to do – to ensure a whole lot of accountabilities. For instance, your annual financial statements are basically investigated when there’s a need.
Ultimately that is there for purposes of protecting beneficiaries by enhancing the role of the Master and increasing the obligations of trustees.
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SIMON BROWN: One place it might hurt. I said up front for professional trust operations such as yourselves at Citadel you are probably already doing a lot of this. I’m thinking around the record-keeping obligation. There is what is required, but in many cases you go further than that.
For some trusts, this might present a problem, particularly if you have, for want of a better phrase, an amateur who is kind of running it.
MBONISI NDLOVU: That is correct, Simon. I often see that people will set up family trusts and then have a friend be an additional trustee who hasn’t trust acumen.
That poses a huge problem in that they do not quite keep the records of the minutes of the meetings, resolutions. Remember, the reason for the existence of trusts is that everything must be documented – so your resolutions, your agreements, et cetera.
With this new dispensation, which applies to all professional trustees as well lay trustees, everybody is held to the same standard.
Take records for instance. Should they want to resign as trustees, they would have to actually keep records of all the documents of the trust they are privy to – for instance, your trust deeds, et cetera, resolutions and minutes.
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Ultimately the standard applies to all trustees, whether they have trust acumen or not. It’s quite important that you bear that mind.
And then of course, for any other person who wants to take on trusteeship roles, that is another obligation imposed by this new bill which is currently under discussion.
SIMON BROWN: The Master of the High Court – you mentioned this – now plays, as I understand, an expanding role in this. What is the Master’s role going to be? You mentioned that if someone wants to resign, it needs to be acknowledged by the Master, who can impose fines. There’s a lot more going for the Master of the High Court.
MBONISI NDLOVU: That’s it. Ultimately, even currently, the Master’s Office has a supervisory role. But now the powers that have been given to the Master’s Office through this bill are more of an active role.
So the Master’s Office will now be privy to annual financial statements, accounting records. It can also issue compliance notices – I’ll get to that shortly – for instance where it needs to conduct investigations.
Right now, we’ve never actually seen an instance where the Master says, ‘We would like to conduct an investigation on this trust’ because, right now, with this bill, what will happen is that the Master will have the power to actually investigate a trust wherever there’s a need to do so.
When I speak about compliance notices, one of the major important things that this bill is bringing forth is this whole idea of ‘beneficial ownership’.
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You would know that in the past couple of years – I think since 2012, 2022, if not 2023, the whole country was greylisted. Because of the greylisting, we had to buff up our laws around beneficial ownership.
Now what this bill aims to do, it actually aims to ensure that beneficial ownership information is transparent and updated.
So one of the major things in this bill is that it says that a trust administration cannot take place until beneficial ownership records have been updated.
So if there are any changes to the beneficial ownership records, those have to be updated immediately. Otherwise we cannot do anything in the trust. For instance, you cannot update the trust deed itself, you cannot amend the Letters of Authority. It’s pretty much a hurdle, a ‘stop’ hurdle – and that’s pretty much that.
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That’s quite key with regard to this, and so it is important to get ourselves clear from the greylisting in future. But also it is quite a huge hurdle, especially because some trusts are not necessarily inactive.
SIMON BROWN: Got you. And then there’s capacity at the at the High Court. But we’ll leave that for a different debate.
We’ll leave it there.
Mbonisi Ndlovu, partner at Citadel Fiduciary, appreciate the time.
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