Does a trust have to prepare financial statements?
That only depends on the Trust Deed.
There is no legal requirement for a trust to prepare financial statements but some trust deeds include such an obligation along with other unnecessary requirements such as that the trustees must meet at least once a year to consider the financial statements.
The problem with stipulations such as these is that if the trustees fail to abide by them they lay the trust open to an interpretation that it is a sham, since they are not taking it seriously themselves.
Our advice is to keep the obligations of the trustees to a minimum. Let the Trust Property Control Act suffice in this regard.
It is not, however, unreasonable to expect the trustees to ensure that proper records of trust assets are kept, but this can by done simply on an Excel spreadsheet, especially as, in a properly structured trust, the trust should normally only own shares in private companies and this would be the extent of its financial records.
Interestingly, all trusts are required by the Master to appoint an auditor/accountant despite there being no such requirement in the Trust Property Control Act.