Possible mismanagement of a trust. Can we recover losses?

Posted on:
8 Jan 2017
Category:
Financial
Posted by:
goldenstar
Occupation:
individual
Region:
kwazulu-natal

My sister and I were left a testamentary trust by our Grandmother in 1987 managed by a bank in South Africa, with the usufruct of the income going to our father. Our father passed away in October last year and some serious questions have arisen regarding the management of the trust. During the last few years we have noted that the trust lost a considerable amount of money, we attributed it to the decline of the SA stock market but the facts that have recently come to light contradict that assumption. Our father over the years withdrew the maximum income quarterly from the trust in ever increasing amounts. More recently he was allowed to withdraw the maximum monthly, apparently tax free. The bank e-mailed us recently when we asked for an explanation on why the trust had lost so much money. They said as our father had (maliciously we believe) withdrawn all of the income generated every month. The bank had to dispose of capital to meet his requirements and they also had administrative fees. This sent the trust into a free-fall which I believe constitutes mismanagement by the bank. Is there any way we can recover the lost money from the bank or our father’s estate?

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