The administration of family trusts has traditionally followed a predictable annual routine, with trustees meeting periodically to approve financial statements, sign resolutions, and meet basic governance requirements. However, since the introduction of the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act 22 of 2022, trustees have already been required to assume greater responsibility for transparency and beneficial ownership reporting. The Draft Regulation of Trusts Bill 2026 takes this development significantly further. If enacted, it will replace the Trust Property Control Act, 57 of 1988 and introduce a far more compliance-driven framework for trust administration, characterised by increased regulatory oversight, enhanced transparency requirements, ongoing reporting obligations and stricter accountability for trustees.

For many years, family trust administration in South Africa has largely been based on trustee autonomy and fiduciary responsibility. Many family trusts have operated with limited interaction with the Master of the High Court beyond the initial registration of the trust and occasional administrative requirements. The Draft Regulation of Trusts Bill, 2026 may fundamentally alter this position. If enacted, the legislation will introduce a framework that places far greater emphasis on continuous compliance, governance, transparency and accountability. Trustees will not only be expected to act in the best interests of beneficiaries, but they may also be required to demonstrate, through proper record-keeping and documented processes, that they have fulfilled their duties appropriately.

One of the most significant themes underlying the Draft Bill is the movement away from passive trust administration. Trustees will increasingly be expected to take an active role in the ongoing management and oversight of trust affairs. Trust administration will resemble the governance of a regulated entity rather than a private family arrangement that requires attention only once or twice a year.

The Draft Bill also expands obligations relating to beneficial ownership information. Trustees may be required to maintain more comprehensive beneficial ownership records and ensure that such information remains accurate and up to date. The Master of the High Court would gain broader oversight powers over these records, reinforcing the growing emphasis on transparency and compliance with anti-money laundering measures. Ongoing verification and updating beneficial ownership information may become a core trustee responsibility rather than a once-off administrative exercise.

Another notable proposal is to introduce annual returns to be submitted to the Master. The Draft Bill contemplates regular reporting and ongoing engagement with the regulatory authority. This represents a material shift in the regulatory landscape and may require trustees to implement formal compliance calendars, maintain more robust records and ensure that trust information is readily available when required. As a result, many trusts may increasingly rely on professional fiduciary and accounting support to manage these obligations effectively.

Equally important is the enhanced accountability expected of trustees. The Draft Bill introduces mechanisms such as compliance notices, administrative fines, and other enforcement measures for trustees who fail to comply with their statutory obligations. This signals a shift to a more regulatory model, where trustees who neglect their duties may face greater personal exposure and accountability. Trustees will need to familiarise themselves with their obligations and ensure that appropriate governance processes are in place throughout the year.

Although the draft Regulation of Trusts Bill, 2026, has not yet been enacted and remains subject to the legislative process, trustees would be well advised to begin preparing for a more regulated environment. Reviewing trust deeds, maintaining accurate beneficial ownership records, ensuring trust documentation is up to date, and establishing sound governance procedures are practical steps to take now to prepare for the direction trust regulation is moving. 

Trusts will continue to play an important role in estate planning, asset protection, and wealth preservation. The way trusts are administered is changing. The days of trustees merely signing annual resolutions and approving financial statements may soon be over. If the Draft Bill is enacted, trustees will be expected to actively monitor, govern and manage trust affairs on an ongoing basis. The era of passive family trusts and passive trustees is likely to become a thing of the past.

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