What Happens to a Trust When the Settlor Dies?

A trust is built to outlive the person who created it. That is its main practical difference from a will, which only takes effect at death. So the short answer to "what happens to a trust when the settlor dies" is usually: very little changes on the day itself, because the trustee already holds the assets and the deed already says what happens next. The detail, however, depends on how the trust was drafted.

This page follows the trust after the death of the settlor, step by step, and explains why the answer differs between a revocable and an irrevocable trust. It gives general information, not advice on your own deed.

Why the answer starts with the deed

Under Mauritian law, the settlor transfers assets to the trustee, who then holds them for the beneficiaries on the terms of the trust deed. From that moment the assets are no longer the settlor's personal property in the ordinary sense. If you need a refresher on the building blocks, read what a trust is first.

Section 11 of the Trusts Act 2001 presumes that a trust is irrevocable by the settlor and the settlor's legal representative, unless the deed contains an express power of revocation. This presumption is the starting point for almost every question about death:

• If the trust is irrevocable, the settlor has no personal right to take the assets back, so the death does not bring them back into the estate.
• If the deed expressly reserved a power of revocation, the position needs more care, because that power may or may not survive the settlor.

The difference is explored in more depth in revocable vs irrevocable trusts.

Step by step after the settlor's death

1. Check the type of trust and the deed

The first task is documentary. The trustee, and any adviser the family consults, reads the deed together with any later amendments and the letter of wishes if there is one. Three questions matter immediately: is the trust revocable, who holds which role, and what the deed provides on the death of the settlor.

2. Notify the trustee and confirm the trust is intact

The trustee is normally informed by the family or the settlor's legal representative. The trust does not fall away because its creator has died. Section 28 of the Trusts Act 2001 also confirms, in a related context, that a trust does not become invalid or lapse merely because a trustee or qualified trustee is missing, which gives the structure a degree of resilience while appointments are put right.

3. Deal with the settlor's own role

A settlor in Mauritius can wear several hats. Under section 8 of the Trusts Act 2001, the settlor may also be a trustee, a beneficiary, a protector or an enforcer, although the settlor cannot be the sole beneficiary of the trust. Death therefore removes whichever of those roles the settlor held, and the deed should say who steps in. If the settlor was also a beneficiary, that interest ends or passes according to the deed. If the settlor was the protector, the deed's successor provisions apply (see below).

How much control a settlor could keep during life is covered in reserved powers.

4. Keep administering the trust

The trustee carries on with its ordinary duties. These include keeping up-to-date accounts and records, and an alphabetical register of the names and last known addresses of each beneficiary and settlor, under section 38(3) of the Trusts Act 2001. Accounting records must be kept for at least 5 years after the operations concerned are completed. A death is a trigger to refresh this information, not a reason to pause it.

5. Apply the next phase of the deed

Only then does the question of who benefits arise. Some deeds hold assets for a surviving spouse first; others provide for a class of family members at the trustee's discretion. The mechanics of paying out are dealt with elsewhere, in how trust assets are distributed to beneficiaries, so this page stops where distribution begins.

Irrevocable and revocable trusts compared

The table is a simplification. In every case the wording of the deed decides, and an adviser should read it before anyone acts.

What happens to the other people in the structure

The trustee

The trustee remains in office. Its duties, including loyalty, prudent management and proper records, do not depend on the settlor being alive. For a closer look at these obligations, see the duties of a trustee toward the family.

A Mauritius trust may have no more than 4 trustees, and at least one must be a qualified trustee at any time. A qualified trustee is a FSC-licensed corporate service provider (Management Licence), or another person resident in Mauritius authorised by the FSC to provide trustee services. If the settlor was also a trustee, the remaining trustees continue and a replacement should be appointed under the deed.

The protector

Section 24 of the Trusts Act 2001 allows the deed to provide for a protector, an adult (which may include the settlor) or a legal person, who advises the trustee. Unless the deed says otherwise, the protector can remove and appoint trustees, set the governing law, change the place of administration and withhold consent to certain acts, without becoming a trustee.

If the settlor was the protector, the deed should name a successor. If it does not, the family may find that nobody holds the removal and appointment powers, which can be a real problem if the trustee later needs replacing. Trust protectors are explained in a dedicated page.

The enforcer of a purpose trust

A purpose trust is valid without beneficiaries if it meets the conditions of section 19 of the Trusts Act 2001, including the appointment of an enforcer and a successor enforcer. If the enforcer has died, refuses to act or can no longer act, the qualified trustee must notify the Attorney-General in writing. The Attorney-General then appoints, within 90 days, the successor named in the deed or, failing that, a suitable person. The same person cannot be both trustee and enforcer of the same trust.

The beneficiaries

Beneficiaries do not gain new rights simply because the settlor has died, but their position often becomes concrete at that point. A beneficiary under a fixed interest may see the interest vest. A beneficiary under a discretionary arrangement still depends on the trustee's exercise of discretion. See beneficiaries' rights and expectations.

Trust assets, the estate and forced heirship

Because an irrevocable trust holds the assets in the hands of the trustee, they generally do not form part of the settlor's estate at death. That is one reason families use trusts for succession planning. It does not, however, mean the trust is beyond challenge. Mauritian forced heirship rules remain a subject on which advice is needed. Section 8 of the Trusts Act 2001 provides that the transfer by a non-citizen settlor cannot be set aside under the succession rules of the settlor's domicile or nationality.

For the position of Mauritian citizens and other cases, read forced heirship and trusts. Whether a trust avoids the formalities of administering an estate is a separate question, covered in succession formalities and trusts.

Tax and compliance after the death

A trust remains a taxable entity after the settlor dies. Under the Income Tax Act 1995, consolidated up to the Finance Act 2026, a trust is taxable on its taxable income at the Part IV rate of the First Schedule, which is 15%. Under section 46(2), certain trusts with non-resident settlors and non-resident beneficiaries, or purpose trusts whose purpose is carried out outside Mauritius, are still caught but remain taxed at that same 15% rate. A distribution to a beneficiary is deemed to be a dividend in the beneficiary's hands under section 46(4).

Death does not by itself change these rules, but it may change who is resident, who is a beneficiary and which tax consequences follow. Always take advice, since the outcome depends on residence and on the deed. The general framework is described in how trusts are taxed in Mauritius.

Beneficial ownership and the register

Anti-money laundering rules treat the settlor, the trustee, any protector, each beneficiary (or class of beneficiaries) and anyone with ultimate effective control as beneficial owners of a trust-type arrangement. When the settlor dies, the information held about the structure must be corrected. FSC Practice Notes for qualified trustees describe how beneficial ownership information is to be maintained and updated.

Section 26A of the Financial Services Act 2007 requires the FSC to keep a register of domestic trusts and of foreign trusts that have at least one qualified trustee. It contains, among other things, the identity and addresses of beneficiaries, trustees, settlors, protectors and enforcers. The qualified trustee must supply the information the FSC requires, in the time and form the FSC sets.

Confidentiality continues to apply. Under section 33 of the Trusts Act 2001, as rewritten by Act 9 of 2019 (in force on 29 May 2019), the trustee keeps trust information confidential, and a court orders disclosure only on the application of an investigating authority where the information is required in good faith for an investigation or proceedings relating to a financial crime.

Foreign trusts with a Mauritian link

If the trust is a foreign trust, section 60 of the Trusts Act 2001 provides that it is governed by its own terms and law, but it is not enforceable in Mauritius to the extent that it would amount to an offence, would be contrary to public policy or would apply directly to immovable property in Mauritius. A settlor who dies owning Mauritian land held through such a structure is therefore a case for specialist advice. The wider rules are in how Mauritius recognises foreign trusts.

Checklist for the family after a settlor's death

• Locate the original trust deed, any amendments and the letter of wishes
• Confirm whether the trust is revocable or irrevocable
• Inform the trustee in writing of the death
• Identify which roles the settlor held (trustee, protector, enforcer, beneficiary)
• Check the deed for named successors to those roles
• Ask the trustee to update its beneficiary and settlor records
• Ask whether the register and beneficial ownership information need correcting
• Review the tax position of the trust and of each beneficiary with an adviser
• Note any time-limited steps in the deed before beneficiaries are paid

When to get advice

The deed, the residence of the people involved and the nature of the assets all affect the outcome. Property in several countries, a blended family or a revocable trust with unclear wording each raises extra questions. You can send a request through the site's form and it will be passed to an FSC-licensed corporate service provider (Management Licence) for a proper review.