The importance of having a Replacement Trustee

by Eduan Botha

Replacement Trustee

There is an old saying; “the only thing that is certain in life is death and taxes”. You will most certainly be aware of the latter part of this saying seeing as it is one of the major reasons you are part of the Wealth Masters Club. The former part, however, is often neglected, and this has absolute dire consequences.

Picture yourself spending years building your trust structures, purchasing properties, making investments and focusing on creating that everlasting wealth for generations to come. Then, all of the sudden, the unthinkable happens, you pass away.

By law, your Independent Trustee may now only perform one action and that is to appoint a trustee to replace you. Nothing else may be done until the new trustee has been appointed. Easy, right? Well, actually no. Human relationships are complex and your Independent Trustee will most likely not be in the loop regarding whom you get along with, who you trust and who not.

You want your wealth and legacy to be in the hands of a person you can trust with your own life as it needs to exist into perpetuity to the benefit of future generations. Your Independent Trustee will be able to make sure that every trust decision is legal and within reason, and the administration of the trust is up to the required standards. But you need someone to continue to grow your legacy, just as you have been doing while you were alive.

Your Independent Trustee must try to all so subtly find out who the best candidate is to replace you as trustee. This happens in the wake of your passing while emotions are raw and the administrative nightmare of dealing with a deceased estate looms. The administration and finalisation of a deceased loved one's estate is an arduous process. It takes up a lot of time and energy. It might be a while before your family is emotionally and mentally prepared and ready to meet with Treasury Trust Services regarding your trusts, and then only can we start the Replacement Trustee process.

This is why naming a Replacement Trustee is of such vital importance. You will be very irresponsible if you do not nominate a Replacement Trustee to be appointed in your stead, should you pass away. Appointing a replacement makes the transition process for your family so much simpler. If you stipulated a Replacement Trustee then your Independent Trustee must appoint that person – and your Independent Trustee will be comforted by the fact that your replacement was someone you trusted enough to take over your legacy.

Your Independent Trustee will then contact the Replacement Trustee, schedule an appointment and go over your structure and all the responsibilities they now have. The Replacement Trustee will then also sign the required documentation in order to effect the change. This happens automatically and without any effort from your grieving family.

We cannot stress enough how important it is for you to name a Replacement Trustee. You may do so directly in your trust deed or you may stipulate in your trust deed that you will name a replacement in your will.

In my professional opinion, it is much better to nominate your replacement in your will as it is much easier to change the person should something happen later on. Instead of amending a trust deed, which is a timely process, you can simply change your will.

You may contact any of our Independent Trustees to help you draft a new will. It is something the Independent Trustee does on a regular basis and he/she will ensure that the will meets the required criteria, legal requirements and standards.

Please note that while the example mentioned in this article only relates to death, there may be certain other circumstances when you might need a Replacement Trustee, for example in the event you become temporarily or permanently incapacitated due to injury or illness.

So, do the right thing and contact your Independent Trustee to set up a will today, naming your Replacement Trustee. Contact to be put in touch with an Independent Trustee to assist you with this.