Transparency in Trust Management: What Information Must Trustees Share with Beneficiaries

Lack of transparency is one of the leading causes of Trust Litigation in South Africa. Beneficiaries are entitled to be kept informed about how trust assets are managed, yet trustees often fail to disclose key documents or decisions. This article explores the legal duty of trustees to account, the rights of beneficiaries to access information, and the remedies available when trustees fall short.

What Trustees Are Legally Required to Disclose

Under the Trust Property Control Act 57 of 1988 and South African common law, trustees must provide sufficient information to allow beneficiaries to protect their interests. This includes:

Annual financial statements
Records of income and expenditure
Asset inventories
Trust resolutions affecting distributions
The trust deed and any amendments

Trustees must act transparently and impartially. Withholding information can amount to breach of fiduciary duty.

Key Statutory Duties

Section 16 of the Act
Requires trustees to submit documentation and account to the Master of the High Court when requested.
Section 17
Obligates trustees to maintain proper books and records for at least five years.
Common Law Obligations
Trustees must inform beneficiaries of material decisions and provide records necessary for oversight.

When Trustees Refuse to Disclose

Failure to disclose information may justify:

A court application to compel disclosure
Suspension or removal of the trustee
Claims for personal liability where loss results from secrecy or fraud

Red Flags for Beneficiaries

Be alert if a trustee:

Consistently delays or ignores information requests
Claims that beneficiaries have “no right to ask questions”
Fails to provide annual financials or bank statements
Avoids holding meetings or signing resolutions
Has personal interests in transactions with the trust

Such conduct may warrant legal intervention.

Practical Steps for Beneficiaries

Request information in writing
Be specific and refer to the trust deed where applicable.
Seek mediation if appropriate
Early neutral intervention may resolve simple misunderstandings.
Consult an attorney
Legal advice can help assess the seriousness of the non-disclosure and determine the best course of action.

Frequently Asked Questions

1. Do trustees have to share trust financials with beneficiaries?

Yes, particularly if the beneficiaries are vested or affected by trust decisions.

2. What if the trustee ignores my request for information?

You may approach the court for an order compelling disclosure.

3. Are trustees accountable to the Master or only to beneficiaries?

Both. Trustees must account to the Master of the High Court and to beneficiaries under the trust.

4. Can a trustee deny access to the trust deed?

No. The trust deed is foundational and must be disclosed upon request.

5. Is non-disclosure enough to remove a trustee?

In serious or repeated cases, yes. It can constitute breach of fiduciary duty.

6. What if I only have a discretionary interest in the trust?

Even discretionary beneficiaries may request relevant information to determine if the trust is being properly managed.

7. Can I ask for proof of expenses?

Yes. Trustees must justify all disbursements and distributions.

8. Does the Act require minutes of trustee meetings?

While not explicitly required, maintaining minutes is best practice and may be compelled during disputes.

9. Are trustees allowed to charge for providing information?

Not generally. Administrative costs must be reasonable and cannot be used to avoid accountability.

10. How often should I expect trust reports?

Typically annually, but more frequently if major transactions occur or if you request it.

Download the Trusts Guide

Whether you are a trustee aiming to fulfil your legal obligations or a beneficiary seeking clarity and transparency, our comprehensive Trust Litigation Guide will help you understand your rights and responsibilities.

Download the Trusts Guide here