It has been a challenging period for fiduciary practitioners, Louis. Please can you elaborate.
There are currently at least two main industry challenges. As the only body solely focused on fiduciary practitioners in SA, FISA is abreast of the fiduciary landscape, lobbying and making input where necessary, and communicating back to members how best to navigate the changes, to the benefit of their clients.
- Legislative compliance
The first challenge is the onerous requirements being put on trustees arising from changes to the General Laws Amendment Act of 2022, thereby introducing the concept of beneficial ownership into the Trust Property Control Act of 1988. Beneficial ownership is an alien concept in South African property law, as it originated from Anglo-American legal systems, and its inclusion thus raises valid concerns about its compatibility with South African legal principles. Despite extensive inputs and interventions by FISA, legislation was amended, meaning that there are now practical implications for practitioners regarding compliance with the Act.
For example, the regulations create practical difficulties in establishing and maintaining accurate records of corporate trustees and the natural persons behind these entities, leaving trustees with unanswered questions and uncertainties. Keeping these records up-to-date as required by the amendments to the Trust Property Control Act also presents substantial practical difficulties.
Add to this the fact that no phasing-in period was provided for, as the regulations were published on 31 March 2023 and became effective on 1 April 2023. The Register for recording these details at the Master’s Office only became available on 5 April 2023.
2. Delays in winding up deceased estates
The second significant challenge are the ongoing delays in the time it takes to administer a deceased estate.
There are various stakeholders involved in winding up an estate. The executor is dependent on the co-operation of financial institutions such as the banks, employer(s) of the deceased, the SARS, the Department of Home Affairs, the courts, the Government Printing Works, and the Master of the High Court. Over the last number of years turn-around times at several of these have deteriorated substantially.
FISA is working on an ongoing basis with the Chief Master and other stakeholders on ways to improve the situation.
→ As an aside, there are also major challenges at the Guardian’s Fund which has recently experienced theft of R18m from the fund, leading to delayed payments to many beneficiaries. FISA is engaging in public debate and also reminding the public of the vital need to have a valid, up-to-date will especially when it comes to minor children, to avoid that their inheritance is paid into the Guardian’s Fund.
Please tell us about the upcoming FISA Conference
The 13th Annual FISA Conference will be held on 17 October at the Sandton Convention Centre. The conference, as in previous years, aims to strike a balance between academic theory and practical application. The theme this year is “Fiduciary practice in a complex world.”