Can a testamentary trust be changed later?

“My wife and I are discussing providing for the creation of a testamentary trust in our will to take care of our minor children upon our untimely death. I’m worried though that if we establish a trust, it may be too rigid to deal with the changing circumstances of our children. Can the trust be changed after our death should it be necessary to do so?”

A testamentary trust or trust mortis causa is established in a will and comes into effect upon the death of the testator (founder) of the will. Such trusts are typically used to protect the interests of minors or dependants who are unable to take care of themselves. Some or all of the assets in the estate are upon the death of the testator moved to the trust which is administered by trustees on behalf of the beneficiaries. A testamentary trust often terminates at a pre-determined time or event, for example when the beneficiaries reach a certain age.

As a rule of thumb the terms of a testamentary trust cannot be amended. The Trust Property Control Act 57 of 1988 (“the Act”) does grant our Courts the power to amend a trust deed, where for example a provision brings about consequences which in the opinion of the court, the founder of a trust did not contemplate or foresee and which hampers the achievement of the object of the founder, prejudices the interest of the beneficiaries or is in conflict with the public interest. 

Accordingly, in a recent High Court decision, it was found that a variation of the provisions of a testamentary trust (brought about by agreement between the trustee and the beneficiaries) was valid. Despite the fact that a trust is of testamentary origin, it does not prevent the trustees and beneficiaries from agreeing to an amendment. The court further stated that if the testamentary trust also confers on a trustee the power to decide when to terminate the trust, it also implies that the trustee has the power to amend the trust deed.

The provisions of the Act which requires a trustee to, in exercising his powers, act with the care, diligence and skill which can reasonably be expected of a person who manages the affairs of another, still applies, and should a trustee decide to amend the provisions of the trust, the trustee will need to exercise his authority in accordance with the Act. 

It is therefore possible that your trust provisions may be varied after your death. We would advise to enlist the help of your estate planner to ensure that your testamentary trust provisions are appropriately wide to provide sufficient scope to the trustees to manage (and if necessary amend) the trust in changing circumstances in a manner that is acceptable to you.

March 8, 2019
Mediation – a go-to option for divorcing couples

Mediation – a go-to option for divorcing couples

At the heart of divorce proceedings, lies an intense personal battle between spouses. Enter mediation as a growing alternative dispute resolution mechanism aiming to preserve relationships and protect the psychological and emotional well-being of children and adults by avoiding drawn-out and combative court proceedings. In this article, we take a brief look at mediation as a go-to option for divorcing couples in South Africa.

Outstanding charges, body corporates and sales in execution

Outstanding charges, body corporates and sales in execution

Recently our Supreme Court of Appeal had to consider whether a purchaser was entitled to only pay for outstanding levies of a sectional title property that was sold in an execution sale or also the other outstanding charges such as water, sewerage etc. where the terms of the execution sale only required payment of the outstanding levies. In effect, the court had to consider whether a body corporate could be forced to accept a lesser amount because of the terms of a sale in execution.

Sign up to our newsletter

Pin It on Pinterest