Dissolution of trust
The dissolution of a trust can be a complex process and may require legal assistance. The process generally involves the following steps:
Trust Deed: The first step in the dissolution process is to review the trust deed to ensure that it allows for the dissolution of the trust. If the trust deed does not contain provisions for dissolution, it may be necessary to amend the deed.
Board Resolution: The trustees of the trust must pass a resolution to dissolve the trust. The resolution must be passed by a two-thirds majority of the trustees.
Notice: The trustees must give notice of the dissolution to all beneficiaries and creditors of the trust. The notice must be given in writing and must contain the date of dissolution.
Disposal of Assets: The trustees must dispose of the trust assets in accordance with the trust deed and distribute the proceeds to the beneficiaries. If the trust has any outstanding liabilities, the trustees must settle them before distributing the proceeds.
Closure of Accounts: The trustees must close the trust accounts and file the final accounts with the relevant authorities.
Deregistration: The trustees must deregister the trust with the relevant authorities, such as the Registrar of Trusts.
The following documents may be required for the dissolution of a trust:
- Trust Deed
- Board Resolution for the dissolution of the trust
- Notice of the dissolution to beneficiaries and creditors
- Final accounts of the trust
- Proof of the disposal of trust assets and settlement of outstanding liabilities
- Deregistration documents for the trust
It is advisable to seek the advice of legal and financial professionals before initiating the process of dissolving a trust.