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trust will continue to exist in perpetuity. This is supported by the fact that our
Trust Property Control Act 57 of 1988 (“the Act”) which governs the operation
of trusts in South Africa, does not explicitly provide for when and how a trust is
terminated. This said, it does not mean that a trust can never be terminated, as
there are a number of events that can occur during the lifetime of the founder,
the trustees or the beneficiaries of a trust which could provide for grounds for
the termination of a trust.

When considering the termination of an inter vivos family trust, the first step will
Commercial govern when the trust will or could be terminated. Some of the most common
always be to turn to the provisions of the trust deed. Often the trust deed will
provisions to this effect encountered in trust deeds are:
• It may terminate once all of the trust assets have been distributed to the
beneficiaries.
• It may terminate after a certain period of time or upon the happening of a
specific event.
• It may terminate at the discretion of the trustees and/or through a resolution
passed by the beneficiaries.
• It may terminate once its primary objective has been achieved.
• It may terminate in the event that it becomes impossible to achieve its main
objective.

In the event that the trustees and/or beneficiaries wish to terminate a trust
pursuant to circumstances that are not provided for in the trust deed itself,
another option available would be to approach the High Court with a request
to terminate the trust in terms of the Act.

There could be a number of reasons why the termination of a trust may be
justified, such as that it has become uneconomical to continue to manage
the trust on behalf of the beneficiaries or there is not sufficient value left in the
trust, or even that the relationship between the beneficiaries and the trustees
have deteriorated to the point where the management of the trust has become
impossible. Each situation would however have to be considered on its own
merits by the court.

For the termination of a trust, it is important that the assets be formally distributed
to the beneficiaries in accordance with the trust deed. Once all liabilities have
been settled and trust assets distributed to the beneficiaries, the trust can be
considered terminated. Importantly though, the trust is not upon termination
simultaneously deregistered as well. Deregistration has to be applied for
separately at the Master’s office where the trust was first registered. The Master
will require a list of documentation to verify that the trust has indeed been
terminated, such as proof that the trust bank account has been closed and all
of the assets have been distributed after which the deregistration of the trust will
be approved.

In general, however, if you have a well drafted trust deed that clearly provides

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