The Draft Regulation of Trusts Bill, 2026 seeks to strengthen trust governance and improve the standard of trust administration in South Africa. 

Clause 15 requires trustees to exercise their powers and perform their duties with the care, diligence, and skill reasonably expected of a person who manages another person's affairs. This provision reaffirms a fundamental principle of trust law, namely that trustees must always act in the best interests of the trust and its beneficiaries. More importantly, it makes it clear that trustees cannot adopt a passive or indifferent approach to trust administration. Trustees are expected to actively participate in decision-making, understand the affairs of the trust, properly consider the consequences of their decisions and ensure that trust assets are administered responsibly and in accordance with the provisions of the trust deed. 

The most significant aspect of Clause 15 is that the required standard is linked to a trustee's own knowledge, experience and expertise. The Draft Bill specifically provides that regard must be given to any special knowledge or experience that a trustee possesses or holds out as having. Furthermore, where a person acts as a trustee in a particular profession or business, that individual will be judged against the level of skill and competence reasonably expected of someone in that profession or business. This means professional trustees, such as legal practitioners, accountants, fiduciary practitioners, and trust companies, are likely to be held to a higher standard than family members or lay trustees who do not have specialised trust knowledge. The rationale is that individuals who market themselves as trust specialists or who accept appointments because of their professional expertise should be expected to apply that expertise when administering trust affairs. Clause 15 introduces a heightened level of accountability for professional trustees and reinforces the expectation that specialised knowledge must translate into competent administration.

Another important aspect of Clause 15 is its treatment of trustee indemnity and exemption provisions. The Draft Bill provides that a trust deed cannot shield a trustee from liability where that trustee has failed to exercise the required degree of care, diligence and skill. Any trust deed provision that attempts to exempt or indemnify a trustee against such liability will be void to that extent. This represents a significant shift towards greater trustee accountability. In practice, trustees will need to ensure that their actions and decisions can withstand scrutiny, since reliance on broad indemnity clauses may no longer offer the level of protection that many trustees have historically enjoyed.

Clause 15 also reminds trustees that trusteeship is not merely an honorary appointment. Trustees occupy a position of trust and confidence and are responsible for safeguarding and administering assets for others' benefit. This requires trustees to exercise independent judgment, stay informed about the trust's affairs, properly evaluate matters before making decisions, maintain accurate records of trustee decisions and resolutions, obtain professional advice where necessary and, above all, act in the best interests of the trust and its beneficiaries. The Draft Bill makes it clear that individuals who accept appointment as trustees must also accept the responsibilities, obligations and potential liabilities that accompany that office.
 
In many respects, Clause 15 shifts away from viewing trusteeship as a nominal role and towards recognising it as a position that requires active participation, competence and accountability. Clause 15 introduces a new benchmark for trusteeship by placing care, diligence and skill at the centre of trust administration. By recognising the higher obligations of professional trustees and limiting the effectiveness of trustee indemnity provisions, the clause strengthens accountability and reinforces the fiduciary nature of the office of trustee. If enacted, this provision is likely to have a far-reaching impact on trust administration in South Africa, requiring trustees to adopt a more informed, proactive, and responsible approach to managing trust affairs. Ultimately, Clause 15 reminds us that the authority to administer trust assets comes with an equally important duty to do so competently, diligently, and in the best interests of those for whom the trust exists.

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Elani Volschenk: FPSA®