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. Without these explicit powers, a trustee is acting outside the bounds of authority granted by the settlor.
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.
| Trust deed requirement | What the clause must cover |
|---|---|
| Digital asset authority | Explicit power to acquire, hold, dispose of and transfer Bitcoin and other digital assets on behalf of the trust. |
| Custody delegation | Authority to deposit Bitcoin with FSCA-licensed custodians and to delegate control of private keys to third parties. |
| Key management and succession | Documented protocol for successor trustee access in the event of the trustee’s death or incapacity. |
| SARS record-keeping | Authority and obligation to maintain transaction records in rand: dates, cost basis, proceeds, sufficient for SARS compliance. |
| Professional advisors | Authority to engage tax practitioners and custody specialists to manage Bitcoin compliance on behalf of the trust. |
| FICA and exchange control | Authority to provide identity documentation to providers and to engage with SARB on cross-border transfers where applicable. |
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. 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
Four categories of authority need to appear in the deed. Each one addresses a distinct risk.
Authority to hold digital assets. The simplest formulation 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.” Without this, a trustee holding Bitcoin is acting outside the deed.
Custody delegation authority. The trustee cannot hold private keys indefinitely if they become incapacitated or die. The deed must permit the trustee to deposit Bitcoin with a custodian and to authorise the custodian to move or transfer it. Recommended language: “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.”
Key management and successor access. 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.”
SARS record-keeping authority. Bitcoin transactions generate capital gains or income that must be reported. 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. No court order, no death certificate, no executor’s authority can recover Bitcoin where the private key was never documented or accessible to anyone else.
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.”
One practical approach is a key escrow arrangement where a third party holds a copy of the private key or recovery phrase, released only upon the trustee’s death with proper documentation. Another approach is to require the trustee to hold Bitcoin on a licensed custodian rather than in personal self-custody. A custodian account is recoverable by the executor with a death certificate and court order. Self-custody Bitcoin held on an undocumented private key is not recoverable by any legal process. The deed can reflect this preference explicitly.
The Conflict with Existing Powers
Some trust deeds contain language that directly conflicts with Bitcoin holdings.
A deed specifying “the trustee may invest only in government securities, corporate bonds and shares listed on the JSE” explicitly excludes Bitcoin. An amendment is required before any Bitcoin can be purchased. The amendment process depends on the 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 a court application.
For a trust that is irrevocable or whose amendment process is complex, the court can grant an order permitting the trustee to hold Bitcoin if satisfied that the power is incidental to the trustee’s duty to invest prudently. This is not automatic. Courts have been willing to grant such orders, but the process requires legal representation and takes time.
The practical first step is a trust attorney reviewing the existing deed to advise on whether the current language permits Bitcoin holdings or whether amendment or court application is required. This review is typically straightforward and inexpensive relative to the risk of proceeding without it.
SARS Compliance and Documentation
The deed must address tax compliance specifically, not just in general terms.
The trustee must maintain records that allow the trust to file accurate tax returns and to respond to SARS data-matching queries under CARF. 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 authorise the trustee to engage professional advisors for Bitcoin tax compliance. Recommended language: “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.”
Without this clause, a trustee who engages a specialist tax advisor to handle the trust’s Bitcoin reporting could face a challenge from beneficiaries about whether the expense was authorised. The clause pre-authorises the engagement and the associated cost.
FICA and Exchange Control Compliance
If the trustee is acquiring Bitcoin on an FSCA-licensed platform, the platform will conduct FICA onboarding. The trust must provide identity documentation and the trustee must declare the nature of the trust. 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 trust intends to move Bitcoin across borders, exchange control applies. The deed should acknowledge this: “The trustee has authority to engage with SARB regarding exchange control approvals for cross-border digital asset transfers and to use the trust’s available offshore allowance for cross-border Bitcoin transfers where lawful and documented.”
The Practical Checklist for Trust Attorneys
When drafting or amending a trust deed that will hold Bitcoin, the following provisions must be present:
- Explicit authority to acquire, hold, dispose of and transfer digital assets including Bitcoin.
- Authority to deposit Bitcoin with FSCA-licensed custodians and to delegate custody of private keys to third parties.
- Authority to maintain private keys and to provide documented access protocols for successor trustees in the event of the original trustee’s death or incapacity.
- Authority and obligation to keep detailed transaction records in rand, including dates, cost basis and proceeds, in a SARS-compliant format.
- Authority to engage professional advisors, including tax practitioners and custody specialists, to manage Bitcoin holdings on behalf of the trust.
- Authority to comply with FICA requirements at onboarding and to provide identity documentation to FSCA-licensed providers.
- Authority to manage cross-border Bitcoin transfers and to engage with SARB on exchange control matters where applicable.
- A succession protocol specifying how the successor trustee will access Bitcoin in the event of the original trustee’s death or incapacity.
The Cost of Getting It Wrong
A trust deed that is silent on Bitcoin creates three distinct risks.
First, the trustee may be 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 or the engagement of specialist advisors.
The cost of amending the deed or applying to court is typically a few thousand rand 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 permanently because the successor trustee had no access to the private keys, is substantially higher. Neither outcome is recoverable.
For any trust holding Bitcoin or planning to hold Bitcoin, a conversation with a trust attorney about the deed is an essential early step. It is one of the lowest-cost compliance measures a trust can take and one of the most consequential if omitted.
Frequently Asked Questions
Can a South African trust hold Bitcoin without amending the trust deed?
It depends on the existing language in the deed. If the deed grants the trustee broad authority to invest in “any asset” or “investments generally,” it may already cover Bitcoin without amendment. If the deed restricts investment to specific asset classes such as shares, bonds or government securities, the deed must be amended before Bitcoin can be purchased. A trust attorney should review the existing deed to confirm which category applies. Proceeding without that review risks the trustee acting outside their authorised powers, which creates personal liability.
What happens to trust Bitcoin if the trustee dies and no access protocol was set up?
If the Bitcoin is held in self-custody and the private key was never documented or shared with anyone, the Bitcoin is permanently inaccessible. No court order, no executor’s authority and no legal process can recover Bitcoin where the private key is lost. This is one of the most serious risks associated with trust-held Bitcoin and one of the most preventable. The deed should require the trustee to maintain a documented access protocol and to provide successor trustee access instructions before any Bitcoin is purchased.
Does a trust need to complete FICA to buy Bitcoin through SimplB?
Yes. FSCA-licensed providers must verify the identity of every client entity, including trusts. For a trust, the FICA process requires the trust deed, trustee identity documents, beneficial ownership information and the trust’s tax reference number. The trust deed should explicitly authorise the trustee to provide this documentation to FSCA-licensed providers as required. Having the documentation organised before starting the onboarding process makes it considerably more straightforward.
What language does a trust deed need for key management and succession?
The deed should require the trustee to maintain a documented protocol for successor trustee access to all digital assets. The protocol must include the location of private keys or recovery phrases, the name of any custodian holding Bitcoin on behalf of the trust, custody account access details, and instructions for how the successor trustee or executor can assume control following the original trustee’s death or incapacity. Some trusts address this by requiring Bitcoin to be held with a licensed custodian rather than in personal self-custody, because custodian accounts are recoverable through legal process in a way that undocumented private keys are not.
Can an irrevocable trust be amended to include Bitcoin powers?
Not unilaterally. An irrevocable trust cannot be amended by the settlor or trustee alone. If the trust deed does not include powers to hold Bitcoin and the trust is irrevocable, a court application to the Master of the High Court is required to obtain an order extending the trustee’s investment powers to include digital assets. Courts have been willing to grant such orders where the trustee can demonstrate that the extension is consistent with the trust’s purposes and the trustee’s duty to invest prudently. The process requires legal representation and typically takes several weeks to a few months depending on the Master’s Office.
Sources
- Trust Property Control Act 57 of 1988: primary South African legislation governing trustees’ powers, duties and obligations, including the legal basis for holding assets in trust
- FSCA — Crypto Asset Regulatory Framework: FSCA licensing framework for crypto asset service providers, relevant when trusts use licensed custodians for Bitcoin holdings
- SARS — Crypto Assets Tax Guidance: SARS guidance on tax treatment of Bitcoin transactions, applicable to trust-level disposals and distributions
- South African Judiciary: developing South African case law on trustees’ authority to hold digital assets without explicit trust deed authorisation
Structuring Bitcoin for a family or entity?
Book a Bitcoin Structure CallWritten by James Caw, Founder of SimplB. James has helped South Africans understand, buy and secure Bitcoin since 2015. SimplB operates as a Juristic Representative of CAEP Asset Managers, FSP 33933. Last updated: May 2026.
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.
