The Trust Property Control Act places personal liability on trustees for the prudent management and safekeeping of all trust assets. A trustee who invests trust funds recklessly, fails to keep proper records, or allows trust assets to be misappropriated faces personal liability. If a trust deed grants the trustee broad investment powers but is silent on digital assets, a trustee who acquires Bitcoin may be personally liable for losses, even if the investment was prudent and the Bitcoin performed as expected.
The solution is precise: the trust deed must explicitly grant the trustee authority to hold, invest in, and manage Bitcoin and other digital assets. The deed must authorise the trustee to engage with crypto asset service providers, to delegate custody, and to maintain or control private keys. Without these explicit powers, a trustee is acting outside the bounds of authority granted by the settlor, and personal liability cannot be avoided.
This article does not draft trust deeds or provide legal advice. It identifies the core issues any competent trust attorney must address when drafting or amending a trust deed that will hold Bitcoin.
The Trust Property Control Act Framework
The Trust Property Control Act creates a statutory duty on trustees to manage trust property prudently and to keep proper records. The Act is permissive: a trust deed can expand these duties or narrow them (within limits). But the Act creates a baseline duty that applies to all trusts unless the deed explicitly modifies it.
A trustee who deviates from the investment powers granted by the trust deed acts outside authority. The consequences are material. If the trustee acquires an asset outside the powers granted by the deed, the trustee is personally liable if the asset depreciates or is lost.
The specific language in a trust deed determines what assets the trustee can hold. Some older deeds authorise investment only in “government securities,” which clearly excludes Bitcoin. Some deeds authorise investment in “shares and bonds,” which also excludes Bitcoin. Some modern deeds grant broad powers to invest in “any asset,” which would include Bitcoin.
The question is whether the existing language is sufficient or whether the deed needs to be amended to include Bitcoin explicitly.
The Language That Must Be Present
The trust deed must grant authority to hold digital assets. The simplest language is: “The trustee has authority to acquire, hold, dispose of, and transfer digital assets, including but not limited to cryptocurrency assets such as Bitcoin, on behalf of the trust.”
The deed must authorise custody arrangements. The trustee cannot hold private keys indefinitely if the trustee becomes incapacitated or dies. The deed must permit the trustee to deposit Bitcoin with a custodian and to authorise the custodian to move or transfer it. The language should be: “The trustee has authority to deposit digital assets with licensed custodians or providers, to delegate custody and control of private keys to third parties, and to engage with Crypto Asset Service Providers (CASPs) licensed by the FSCA.”
The deed must address key management. If the Bitcoin is held in self-custody, someone must control the private keys. If the trustee dies, the executor or successor trustee must be able to access the keys. The deed should permit the trustee to: “Maintain, document, and securely store private keys or recovery phrases on behalf of the trust. The trustee must maintain a documented protocol for providing access to private keys to the successor trustee or executor in the event of the trustee’s death or incapacity.”
The deed must authorise record-keeping and reporting specific to Bitcoin. Bitcoin transactions generate capital gains or income that must be reported to SARS. The deed should grant authority to: “Keep detailed records of all digital asset transactions, including dates, amounts, cost basis, and proceeds. The trustee must maintain documentation sufficient to comply with tax reporting requirements imposed by SARS.”
The Succession and Access Problem
The most critical gap in many trust deeds is the absence of language specifying what happens when the trustee dies or resigns. If Bitcoin is held in self-custody and only the original trustee knows the private key, the successor trustee cannot access the Bitcoin. The coins are irretrievably lost.
The trust deed must address this by requiring the trustee to: “Maintain a documented protocol for successor trustee access to digital assets. In the event of the trustee’s death or incapacity, the trustee must have provided documented access instructions (including private keys, recovery phrases, or custody account information) to an identified successor trustee, executor, or an independent key escrow provider.”
The deed might establish a key escrow arrangement where a third party (a specialised key escrow company) holds a copy of the private key or recovery phrase, released only upon the trustee’s death with proper documentation. This prevents permanent loss.
Some deeds address this by requiring the trustee to keep Bitcoin on a licensed exchange (like SimplB) rather than in self-custody. An exchange account is recoverable by the executor with a death certificate and court order. Self-custody Bitcoin can be permanently lost. The deed can reflect this preference by authorising: “The trustee may hold digital assets on FSCA-licensed platforms or with institutional custodians, provided the trustee maintains documented procedures for successor trustee access.”
The Conflict with Existing Powers
Some trust deeds contain language that conflicts with Bitcoin holdings. A deed that specifies “the trustee may invest only in government securities, corporate bonds, and shares listed on the JSE” explicitly excludes Bitcoin. An amendment is required.
The amendment process depends on the trust deed. Some deeds allow the settlor to amend unilaterally. Some require trustee consent. Some require consent from beneficiaries. Some trusts are irrevocable, meaning no amendment is possible without court application.
For a trust that is irrevocable or whose amendment process is complex, a court application may be necessary. The court can grant an order permitting the trustee to hold Bitcoin if the court is satisfied that the power is incidental to the trustee’s duty to invest prudently. This is not automatic, but courts have been willing to grant such orders.
The practical approach is to have a trust attorney review the existing deed and advise on whether the current language permits Bitcoin holdings or whether amendment or court application is required.
SARS Compliance and Documentation
The deed must address tax compliance. The trustee must maintain records that allow the trust to file accurate tax returns and to respond to SARS queries. The deed should require: “The trustee must maintain records of all digital asset acquisitions, disposals, and transfers, including dates, amounts in both Bitcoin and rand, cost basis in rand, and proceeds in rand for each transaction. These records must be maintained in a format that permits compliance with SARS reporting requirements.”
The deed must also specify the trustee’s authority to engage professional advisors to manage Bitcoin tax compliance. This might be a tax practitioner or a specialist cryptocurrency tax advisor. The language should authorise: “The trustee may engage professional advisors, including tax practitioners and cryptocurrency specialists, to manage tax compliance relating to digital assets and to represent the trust before SARS.”
FICA and Exchange Control Compliance
If the trustee is acquiring Bitcoin on an FSCA-licensed platform, the platform will conduct FICA (Know Your Client) onboarding. The trust must provide identity documentation, and the trustee must declare the nature of the trust (whether it is a family trust, a business trust, etc.).
The deed should authorise the trustee to: “Provide the trust’s identity information, beneficial ownership documentation, and tax information to FSCA-licensed providers and custodians as required for FICA compliance.”
If the trustee intends to move Bitcoin across borders, exchange control applies. The deed should acknowledge this by authorising: “The trustee has authority to engage with SARB regarding exchange control approvals for cross-border digital asset transfers, and to use the trust’s offshore allowance for cross-border Bitcoin transfers.”
The Practical Checklist for Trust Attorneys
When drafting or amending a trust deed that will hold Bitcoin, attorneys should include:
- Explicit authority to acquire, hold, dispose of, and transfer digital assets including Bitcoin.
- Authority to deposit Bitcoin with licensed custodians and to delegate custody of private keys.
- Authority to maintain private keys and to provide documented access protocols for successor trustees.
- Authority to keep detailed transaction records in a format compliant with SARS requirements.
- Authority to engage professional advisors (tax practitioners, custodians, specialists) to manage Bitcoin holdings.
- Authority to comply with FICA requirements at onboarding and to provide identity documentation to providers.
- Authority to manage cross-border Bitcoin transfers and to engage with SARB on exchange control matters.
- A succession protocol specifying how the successor trustee will access Bitcoin in the event of the original trustee’s death or incapacity.
The goal is to ensure that the trustee has explicit authority to manage Bitcoin on behalf of the trust, that proper records are kept, that succession is planned, and that the trustee’s personal liability is limited to the duty of prudent management (which it cannot be limited beyond).
The Cost of Getting It Wrong
A trust deed that is silent on Bitcoin creates three risks. First, the trustee is potentially acting outside the powers granted by the deed, creating personal liability. Second, if the trustee dies or resigns without providing access instructions, the Bitcoin may be permanently inaccessible. Third, the trust’s tax compliance may be incomplete because the deed did not authorise proper record-keeping.
The cost of amending the deed or applying to court is typically a few thousand rands and takes a few weeks. The cost of resolving a dispute between the trustee’s estate and beneficiaries about whether the trustee had authority to hold Bitcoin, or the cost of losing Bitcoin because the successor trustee had no access to the private keys, is substantially higher.
For any trust holding Bitcoin or planning to hold Bitcoin, a conversation with a trust attorney about the deed is essential. It is one of the lowest-cost compliance steps a trust can take and one of the most consequential.
This article is for general educational purposes only and does not constitute financial, legal, tax, or exchange control advice. The information reflects the regulatory position as at the date of publication. Your individual circumstances may differ and you should seek qualified professional advice before making any decisions.
