Trust deeds contents
The terms of the trust deed can be different and different insolvency practitioners may have different styles, but there are some details which all trust deeds must have.
The trust deed must state:1s167 B(S)A) 2016 •that all of the client’s estate, unless excluded (family home), is conveyed to the trustee;
•that the client agrees to convey to the trustee, for the benefit of creditors generally, any estate (wherever situated) which:
◦is acquired by the client during the four years beginning with the date on which the trust deed is granted; and
◦would have been conveyed to the trustee had it been part of the client’s estate on the date on which the trust deed was granted.
Where the client’s home, or part of it, is excluded from the estate conveyed to the trustee, the trust deed must also include details of any secured creditor who has agreed not to claim under the trust deed for any of the debt in respect of which the security is held.
Before the trust deed is granted, the trustee must advise the client that granting the deed may result:2s167 B(S)A) 2016 •in the client’s estate being sequestrated;
•in the client’s being refused credit (before or after the client’s discharge);
•subject to any exclusion mentioned in the trust deed definition, in the client not being able to remain in their current place of residence;
•subject to any such exclusion, in the client being required to relinquish property which they own;
•in the client’s being required to make contributions from income for the benefit of creditors;
•in damage to the client’s business interests and employment prospects; and
•in the trust deed becoming public information.
The trustee must provide the client with a Debt Advice and Information Package. The trustee and the client must both sign a statement to the effect that the trustee has fulfilled their duties.3s167 B(S)A) 2016