Cape Times

Can one change the name of a trust?

- PHIA VAN DER SPUY Phia van der Spuy is a registered fiduciary practition­er of South Africa®, a Master Tax Practition­er (SA)™, a trust and estate practition­er and the founder of Trusteeze®, a profession­al trust practition­er.

A TRUST is recognised by its unique registrati­on number, not by its name. One is not required to reserve the name of a trust before it is registered.

For companies, one has to reserve its name before it is registered. There may therefore be multiple trusts in South Africa with the same name. It is wise not to make the name of the trust too recognisab­le, such as your surname, so that creditors cannot trace the trust too easily.

It is possible to have a trust’s name changed, if you so wish. Changing the name of an inter-vivos trust (a trust created during your lifetime) will require the lodgement of an amended trust deed with the master of the high court who registered the trust.

The trust deed stipulates the name of the trust and any amendment thereof will require an amendment to the existing trust deed. However, to have the name of a testamenta­ry trust (a trust created upon your death in your will) changed, one would have to apply to court.

Although it is more cumbersome to amend any provisions of a testamenta­ry trust, Section 13 of the Trust Property Control Act is important because it grants the court certain powers. The section provides as follows: If a trust instrument contains a provision which brings about consequenc­es, which in the opinion of the court the founder did not foresee.

If It hampers the achievemen­ts of the objects of the founder; or prejudices the interests of beneficiar­ies; or is in conflict with public interest, then the court may delete or vary such provision or make any order which the court deems fair under the circumstan­ces.

This effectivel­y means that a trustee, or any other person, can apply to court to have a testamenta­ry trust amended as envisaged in terms of this section.

This may be a costly exercise just to change its name, and a name change request may not even meet the requiremen­ts of Section 13. However, once the court approves the change, a similar process will be followed, as described below for inter-vivos trusts.

The procedures below should be followed when changing the name of an inter-vivos trust:

The applicatio­n must be supported by the founder, the trustees and the beneficiar­ies, and the trust deed must not expressly prohibit such a change. If the trust deed prohibits a change, the trust deed will first have to be amended. An inter-vivos trust is a stipulatio alteri (a contract on behalf of a third person – Crookes v Watson case of 1956).

In terms of the principles applicable to a stipulatio alteri, the beneficiar­ies in the case of an inter-vivos trust acquire stipulated rights in the trust property only when they accept the benefits of the stipulatio. It means they’ve either physically received distributi­ons from the trust, or they have merely written to the trustees and accepted their benefits as beneficiar­ies.

A proper deed of amendment should be lodged with the master of the high court, reflecting the old and the new name. The original Letters of Authority of the trustees, on which the old name is indicated, must be lodged with the master of the high court.

If the master of the high court is satisfied that all the requiremen­ts for a valid amendment have been met, an amended Letters of Authority will be issued.

Once the master has issued an amended Letters of Authority, it is the obligation of the trustees to inform third parties of the name change, and have the title deeds of fixed property endorsed accordingl­y.

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