Trustee can also be removed by master of high court

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- Trustee can also be removed by Master of High Court (when trust assets are in danger). Trustee’s actions might have been in bad faith or misconduct, but not only requirements. Tijmstra No v Blunt-Mackenzie 2002 Beneficiaries There must be a specific or determinable trust beneficiary. If capacity to nominate the beneficiary is delegated, the trust instrument must stipulate the ‘group’ to choose from Income beneficiary: benefits from income yielded by trust capital Capital beneficiary: benefits from trust property, usually when trust dissolves Income beneficiary can also be capital beneficiary and vice versa Founder must indicate the object for a trust with impersonal object. The beneficiary may be a natural or juristic person. It need not exist at time of commencement of trust, nor have contractual capacity. Trust may lay down certain qualifications or disqualifications regarding beneficiary. Rights of beneficiaries These can be determined by: - existence of fiduciary relationship - type of trust - provisions of the trust instrument Every beneficiary has a right to claim the trustee fulfil his duty and not act contrary to obligations, because there is a fiduciary relationship. Beneficiary may apply for court order directing the trustee to perform. 32
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1) Income beneficiary The beneficiary’s right is mainly determined by nature of trust: non-discretionary and discretionary. Non-discretionary: ‘I bequeath R10 000 and shares in ABC Comp to the trustee, Mr Proudfoot, in trust. The income beneficiary is my wife, Zara.’ Zara obtains vested personal right at commencement of trust. She may claim payment of the income by the trustee as it becomes distributable. She does not have to wait for anything to happen. Discretionary: ‘I bequeath R10 000 and shares in ABC Co to my trustee, Mr Moto, in trust. Trustee has discretion to choose the income beneficiary from among my grandchildren and the extent of the benefits’ Chosen grandchild only acquires a vested personal right once the trustee has exercised his discretion. The beneficiary may claim the income the trustee has awarded, which will be paid out at the destined time. Until trustee actually exercises discretion, the beneficiary only has an expectation of being benefited. 2) Capital beneficiary Bewind trusts ‘I bequeath my assets to my child, Zet. The assets must, however, be held in trust and administered for Zet’s benefit by my trustee, X, in terms of the provision of clause 10’. At the creation of bewind trust, the beneficiary acquires a vested personal right to the transfer/cession of trust property to him. The personal right will be enforceable against the executor. On transfer/cession, the beneficiary becomes owner of the trust property, subject to trustee’s control. Ownership trusts - Non-discretionary trusts without provision for substitution ‘I bequeath my assets to my trustee, Mr Kotze, in trust. The income beneficiary is my wife, Vinny. Capital beneficiary is my son, Rob’.
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