Peter Veldhuizen | Managing Director | Gillan & Veldhuizen Inc | mail me |
When a trust suffers a loss through negligence, misconduct or mismanagement, can the beneficiaries take legal action directly against a third party? The answer is nuanced. Recent legal developments, such as the McCann vs McCann case in the KwaZulu-Natal High Court, are bringing new clarity to the rights and remedies available to trusts and their beneficiaries.
The administration of trusts and estates is ultimately a matter of trust, pun intended. But that trust must be earned and safeguarded through careful planning, transparency and the right appointments. When things go wrong, beneficiaries are not without recourse.
From heir to litigant
Traditionally, only trustees have the legal standing to act on behalf of a trust. But what happens when trustees are unable or unwilling to take action, or when their own conduct is under scrutiny? This is where the Beningfield exception comes into play.
Originating in UK common law and affirmed by South African courts in cases such as Gross vs Pentz and Standard Bank vs July, this principle allows beneficiaries to step in under specific circumstances. The courts have held that if trustees are conflicted, delinquent, or unavailable, a beneficiary with a direct interest may act to preserve or recover trust assets.
It is not a free-for-all. The beneficiary must show a clear and pressing risk to the assets they stand to inherit or benefit from. In rare but necessary cases, this marks the transition from heir to litigant, where beneficiaries act to protect the integrity of the trust.
The McCann case
In the 2025 McCann case, the applicant brought an urgent High Court application to preserve the business interests of her late husband’s estate. With the executor not yet appointed and concerns mounting over large and unusual cash withdrawals by the deceased’s father (a former trustee and now employee of the business), she sought to interdict family members from mismanaging company funds that formed part of the estate’s value.
Although she was not a trustee or business member, the court ruled that she did have locus standi to act. This was due to her position as the deceased’s sole heir and the absence of an executor at the time. However, her claims succeeded only in part.
The court confirmed limited relief and stressed that once an executor is appointed, the baton of responsibility passes fully to them. This ruling demonstrated how beneficiaries may move from heir to litigant in exceptional circumstances. The courts recognised her right to intervene, but only to prevent immediate harm to the estate until formal administration resumed.
Trustees’ duties and beneficiaries’ rights
Trustees have a fiduciary duty to act in the best interests of beneficiaries. This includes prudent financial management, full disclosure of relevant information and compliance with the trust deed’s provisions.
Trustees are the custodians of someone else’s legacy. Beneficiaries are entitled to proper accounting, access to trust documents and explanations for decisions affecting their rights.
– Katherine Timoney, Senior Associate at Gillan & Veldhuizen Inc
In Doyle v Board of Executors, the court confirmed that even if a beneficiary stands to inherit only after another’s death, they are still entitled to a full accounting of the trust’s administration during that period. Transparency is not optional; it is a legal obligation.
When trustees fail to fulfil their duties, beneficiaries may again find themselves stepping from heir to litigant, asserting their right to accountability and protection of trust assets.
Avoiding litigation through prevention
Disputes between trustees and beneficiaries are common but often avoidable. One of the most effective tools is to include a dispute resolution clause in the trust deed. Mediation and arbitration provide faster, more private solutions than lengthy court proceedings.
In emotionally charged family matters, preservation should be the goal, not only of assets but of relationships too. Preventive governance and regular communication can reduce the risk of conflict and prevent beneficiaries from being forced from heir to litigant.
The ability of a beneficiary to sue on behalf of a trust should remain the exception, not the rule. A well-drafted trust deed, transparent administration and careful selection of trustees can prevent the need for litigation altogether.
Trusts are not merely tax tools. They are instruments of legacy and continuity. With transparency, diligence and proactive governance, families can preserve both wealth and relationships without ever crossing the line from heir to litigant.
