The new Trust Property Control Act of 2018 is a fairly recent development in the Botswana legal system.
The Act was introduced to govern and regulate Trusts in Botswana, which until recently were unregulated.
An important feature of the Act is the requirement for registration of Trusts with the office of the Master of High Court, (the “Master”) and the introduction of a register of trustees maintained by the Master.
Notwithstanding the requirement to now register a Trust, the Act does not however set out the practical steps to be taken when registering a Trust.
Below is a high- level guide on the practical steps to be taken when registering a Trust under the Act. In this respect, please note however that this guide does not exhaustively set out all steps that should be taken but rather highlights only the most crucial steps that should be taken when establishing and registering a trust.
One of the first steps in establishing and registering a Trust is obviously that the founder should have a clear trust objective in mind. There are many reasons for establishing trusts and the founder should be clear in his/her/its mind on why a Trust is being set up and registered including who will be the beneficiaries and what property will be settled upon the Trust.
The next important step is for the founder to identify a person willing to act as a trustee and then secure that persons consent to act in such capacity together with settling on how that person is to be remunerated for providing trustee services. From our experience it is generally better to appoint a juristic person to be a trustee because this removes the inconvenience of having to replace a trustee upon his/her death or incapacity. Appointing a juristic person does however generally come at a higher cost to the Trust and the terms of appointment are often more complex.
Following on from the above steps, the founder should engage an attorney to prepare a trust deed. This is a very important document because it regulates the operation of the trust and the powers of the trustees. This document also will set out the aims of trust, name the beneficiaries, describe what property will be settled on the Trust and will identify/ appoint the trustees. It is therefore critical that this document is very carefully considered and well drafted.
Once the trust deed is in place, the next step is to obtain trust registration application forms from the offices of the Master, or online from the Master’s website. These must be completed by all the Trustees as required and upon completion, submitted to the office of the Master together with certain supporting documents, including certified copies of passports/identity cards.
Once all the required documents are submitted to the Master’s office, a registration number will be allocated and the application will be referred to the Master’s assistant for processing. It is important at this stage to follow up with the office of the Master to obtain the registration number and direct contact person for all further correspondences relating to the Trust.
If the Master is satisfied with the application and supporting documents, he/she will approve the said Trust and issue Letters of Authority in terms of Section 7 of the Trust Property Control Act of 2018, These letters serve to authorise the Trustees to act on behalf of the Trust and upon receipt of same , the trustees must establish a separate trust account for the trust with a bank or building society and submit full details thereof to the Master within 14 (fourteen) days from the date of receipt of the Letters of Authority.
The final step in the process is for the founder/settlor to transfer all intended trust property to the Trust. Where the trust property includes immovable property, a conveyancer will need to be involved in this process.
The establishment and registration of a Trust is a complex process which if not done properly can result in risks to the beneficiaries and trust property as well as long delays with the registration at the Masters office. To avoid such risks an attorney well versed in Trusts should be appointed to provide support and direction on the process.
The Estate Administration and Tax Advisory department of Akheel Jinabhai and Associates (in association with Mckee Commercial Law), headed by Partner Obakeng M. Andreck and assisted by Mark Mckee (head of the AJA Commercial Department), has the expertise and skills to assist with trust registration and administration