Trustees' Duties in South Africa: The TPCA s 9 Standard of Care [2026]

The s 9 standard of care — and you cannot contract out of it

Being a trustee is not a passive honour. Trustees must apply real care and skill to the management of assets that belong to others, and the standard against which they are judged is set by statute, not by the trust deed. It is an objective standard: the question is not whether a trustee did their personal best, but whether they met the standard reasonably expected of someone managing another’s affairs.

The second half of section 9 is what gives the standard its teeth. A trust deed cannot lawfully exempt a trustee from liability for falling short of it — any such clause is simply void to that extent.

The practical consequence: a wide “the trustees shall not be liable for any loss” indemnity in a deed offers no protection against a real breach of the duty of care. It can cover honest errors that still meet the standard, but it cannot rescue a trustee who failed to act with reasonable diligence.

Letters of authority before acting

Appointment as a trustee in the deed is not enough. A trustee may not act in that capacity until the Master of the High Court has authorised them in writing — the authorisation issued in the form of letters of authority. The Act makes this a precondition to acting at all:

In practice, the Master issues the nominated trustees with letters of authority once all the required documents are received, and no trustee may act until that written authority is in hand — the position set by section 6(1) above. Acting before letters of authority are granted is not a technicality: the acts are a nullity, and contracts purportedly concluded by an unauthorised trustee can be void, leaving the trustee personally exposed for any loss.

Since 18 March 2025 letters of authority in trusts are generated by the Master’s system with a QR code and are no longer physically signed. Scanning the code shows whether the letter is valid and whether it is the latest one issued — a quick check on a co-trustee’s or counterparty’s letter before the trust relies on it. Letters in the old format stay valid unless amended or recalled (Chief Master’s Directive 2 of 2025).

Authority is not automatic. The Master will not authorise a person who is disqualified — for example an unrehabilitated insolvent, a delinquent director or someone removed from an office of trust for dishonesty — and will not issue letters until security has been furnished or dispensed with:

Keeping trust property separate from the trustee’s estate

A trustee holds trust property in a representative capacity, not as owner. The Act reinforces this by keeping the trust estate ring-fenced from the trustee’s personal estate — which is exactly why the structure protects assets from the trustee’s personal creditors.

Section 10 of the Act backs this up by requiring trust money to be kept in a separate trust account — trust funds must not be run through a trustee’s own bank account. The Act states the duty in plain terms:

Open a dedicated trust bank account, register trust assets in the trustees’ names “in their capacity as trustees of the [name] Trust”, and never co-mingle trust money with personal funds. Co-mingling is one of the clearest markers a court uses to find that the separation between trustee and trust was never real.

The independent trustee and the Parker warning

The single most common reason a family trust fails is that the founder never genuinely let go. Where the founder is the dominant trustee, the only real decision-maker, and the main beneficiary, there may be no practical separation between ownership and enjoyment — and the courts have said so.

The related “alter ego” argument comes from a different case. In Badenhorst v Badenhorst [2005] ZASCA 116; 2006 (2) SA 255 (SCA), a divorce, the SCA counted trust assets in the husband’s estate because he controlled the trust and, but for the trust, would have owned the assets himself. The test is de facto control, not only control on paper — so a founder or trustee who in practice decides everything puts the trust assets at risk in a divorce claim even if the deed looks independent.

The remedy the SCA proposed is the independent-trustee rule — and Cameron JA framed it not as a statutory command but as something the Master should insist on for family trusts where every trustee is a beneficiary and all the beneficiaries are related:

There is no blanket statute compelling every trust to have an independent trustee — Cameron JA put it as guidance for the Master, not a statutory obligation. Distinguish four things: the Act (silent), the deed (which may require one), the Master’s practice (below), and our recommendation (always appoint one). The Parker reasoning makes it the prudent default. An independent trustee should be someone with no personal interest in the trust who can bring real scrutiny to decisions — and, crucially, who actually participates rather than rubber-stamping the founder’s wishes.

The Master’s practice is set by Chief Master’s Directive 2 of 2017, para 3.8, which puts Parker into effect. When a trust is first registered and the deed shows a family business trust — the trustees can contract with independent third parties (so the trust can have creditors), the trustees are all beneficiaries, and the beneficiaries are all related to one another — the Master must consider appointing an independent trustee. The Master may dispense with that where the founder shows good cause, or may instead require security, or annually audited financial statements with the auditor told to alert the Master if creditors are likely to be harmed. The independent trustee must be an outsider — no family link to the founder, the trustees or the beneficiaries, and no interest as a beneficiary — but need not be a professional.

Personal liability — and the transparency duties that feed it

The duty of care, the authority requirement and the separation rule converge on one point: a trustee who gets it wrong is personally on the hook. A trustee can be held personally liable for loss caused by acting without letters of authority, by breaching the section 9(1) standard, or by treating trust assets as their own — and section 9(2) means a deed indemnity will not save them.

Statutory transparency duties are now part of that liability picture. Since the General Laws Amendment Act 22 of 2022, trustees must establish, keep and lodge a beneficial-ownership register for the trust with the Master under section 11A of the Act:

The register is lodged electronically only, on the Master’s Trust Beneficial Ownership Register online system (Chief Master’s Directive 8 of 2023, effective 17 October 2023) — the Master accepts no paper register, and a filing with SARS does not count:

This is a personal trustee duty backed by a criminal sanction — on conviction, a fine of up to R10 million, or imprisonment of up to five years, or both (s 19(2)) — and it sits alongside a separate company-side filing. For the full picture of the two registers and who counts as a beneficial owner, see beneficial-ownership registers. A trustee who wants to step back — or who can no longer meet these duties — should plan the exit through amending or terminating the trust and a proper handover, not by quietly going inactive. The beneficiaries to whom all of these duties are owed are explained under trust beneficiaries.

Two further 2022 duties travel with the register and carry the same sanction. A trustee must tell every accountable institution (a bank, an attorney, an estate agent) that they are dealing as trustee and that the transaction concerns trust property, and must record the prescribed details of the accountable institutions the trust uses as agents or service providers:

Record-keeping has its own trust-law rule, separate from the SARS retention periods for tax records. The Act fixes the period by reference to the trust’s termination, not a rolling five years, and only the Master’s written consent shortens it:

A trustee who fails these duties does not simply incur liability — they can be removed. The Act gives the court a wide power to remove a trustee whose continuance is not in the interests of the trust and its beneficiaries, and gives the Master a power to remove on defined grounds, including a failure to perform the duties this Act imposes:

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