Botswana Trust Property Control Act, 2018
The recently enacted Trust Property Control Act makes the Master of High Court the Authority for registration and even correction of trust deeds that are not in the interests of beneficiaries.
A TRUST can of course hold assets to protect them and to distribute income out of them. More importantly, trusts can transform businesses, transfer wealth, assist with succession plans, ensure governance and achieve compliance with laws and regulatioins.
Trust is an arrangement to give benefits to beneficiaries or to achieve certain objectives. The arrangement should involve a trustee owning the property under certain terms and conditions. The details of the arrangement should be in writing, called a Trust Instrument. (Section 3 of the Trust Property Control Act 2018 (TPC2018). Trust instrument cannot counter its objectives. A Trustee then is allowed to apply court to court and vary or amend or omit these provisions (S14 of TPC2018)
Master of High Court regulates Trusts by maintaining a Trust Register of trusts and trustees, which is a public document (S4 of TPC2018). Master keeps all documents and records which should also be registered (S19 of TPC2018).
- Every trustee should pay a fee to the Master and register his appointment and within 6 months lodge the trust instrument. (S7 of TPC2018) with the Master.
- Trustees should register his or her address or change of address.
- Trustees may be asked to furnish security for the due and faithful performance of their duties.
- Trustees can be artificial persons like companies in which case nominees of the company needs to register (S7 of TPC2018).
- Master has powers to appoint trustees after consultations with interested parties, where the position falls vacant.
- Master authorises foreign trustees (S9 of TPC2018).
- A trustee may resign by notice in writing to the Master, beneficiaries with legal capacity, the tutors or curators, regardless of whether the trust instrument provides for the resignation (S22 of TPC2018).
- A trustee may be removed from office by the court under certain circumstances (S21 of TPC2018).
Duties of Trustees (S10 of TPC 2018)
- Act with care, diligence and skill reasonably expected of a person managing the affairs of another
- Know the terms of the trust and act in accordance with them;
- Act honestly and in good faith;
- Hold or deal with trust property
- Act for the benefit of the beneficiaries
- Further the permitted purpose of the trust;
- Exercise trustee powers for a proper purpose and not for their own benefit
- Avoid a conflict of interest
- Treat all beneficiaries in line with the terms of the trust
- Not make any profit from the trusteeship
- Not to take any reward for acting as trustee except for legitimate remuneration and expenses
A trustee shall deposit trust funds in a separate trust account (identified as trust account) at a bank or building society (S11 of TPC2018). Trustee’s books or the registration documents should show the property or investment as trust property.
Trust Books and Records (S18 of TPC2018)
Trustee should keep trust instrument, documents containing terms of the trust and any variation, records that identify assets, liabilities, income and expenses that are appropriate to the value of the trust property, any records of trustee’s decisions, contracts entered into, accounting records and financial statements prepared during the trusteeship, documents of appointment or removal, including court orders of such, any letter or memorandum of wishes from the settlor, any other document relevant for the administration of the trust
Where there is more than one trustee, each trustee shall comply with these provisions. A trustee shall not destroy any document serving as proof of investment, safe custody, control, administration, alienation or distribution of trust property before 10 years from the termination of a trust elapses.
If an auditor notices a material irregularity in connection to the administration of the trust, they may report it in writing to the trustee and if not rectified to the auditor’s satisfaction within one month from the reporting date, the auditor shall report it in writing to the Master (S16 of TPC2018).
The trustee shall, at the written request of the Master, account for administration and disposal of trust property, deliver any document relating to such, and answer honestly and truthfully any questions to put to her by the Master. The Master may order an investigation into the matter (S17 of TPC2018). The Master or any person having interest in the trust property may apply for a court order directing the trustee to comply with a request or perform a duty imposed by the trust instrument where they fail to do so (S20 of TPC2018).