Trusts in Zimbabwe: Why Family Trusts Are More Effective in Estate Planning Than Wills

When it comes to planning about family succession matters — asset management and distribution — a lot of considerations are put in the mix. 

Family trusts legal in Zimbabwe over wills in estate and family planning


Introduction - What is a Trust?

While others still opt for having their testamentary matters done through wills, which still remains a safe way to deal with one’s property/assets upon their death, family trusts have increasingly come into vogue because of their advantages over the traditional way as will be outlined by this article.

Generally,  a trust is a legal relationship created between a founder and beneficiaries, administered by trustees. This is when a founder transfers or donates their property to a third party [trustees] which property is intended for the beneficiaries.

Thus, a trust is a legal entity with its own separate and distinct rights, much like a natural person or corporation.

It is an entity that creates a legal relationship [or a fiduciary relationship] in which one party, referred to as a founder/grantor, gives/donates to another party, the trustee, to hold title to property/assets for the benefit of a third party referred to as the beneficiary. Such a fiduciary arrangement allows for the trustee(s) to hold, control, and administer assets on behalf of the beneficiary/beneficiaries — and of course, for the benefit of the latter.[1]

So, in a trust, there are three distinct parties — i.e, the founder/grantor (a person donating or giving), the trustee (a person holding the property on behalf of another), and the beneficiary (the person set to benefit from the set up). Trustees are in charge of this relationship and should act in fiduciary duty towards beneficiaries.[2]

If I am the Founder of the Trust, do I still own the property?

What is key to note is that once the grantor donates and trustee accepts the donated asset on behalf of the beneficiary, the grantor ceases to have control over the donated asset. The asset becomes wholly divorced from the grantor's estate and becomes the Trust's property which will be used for intents and purposes for which the trust was formed.

An example is where a parent (founder) transfers his farm to a trustee to be administered on behalf of her children.

A trust is brought into being, and is legally binding, through a deed of trust or notarial deed prepared and attested to by a notary public, who is registered legal practitioner. The notarial deed/deed of trust must be registered by the Registrar of Deeds at the Deeds Registry — one copy must remain be at the Harare registry, another copy at the Bulawayo registry, and another copy for the trust.

The Requirements of Setting up a Family Trust in Zimbabwe

As per the case Administrators, Richards v Nichol 1996 (4) SA 253 (C) 258E-F, below are the essential elements required for a valid trust:[3]There must be the intention to create a trust.

The intention must be expressed in a way that creates an obligation.

 The object of the trust must be lawful.

The trust property must be defined with certainty.

The beneficiaries must be ascertained or ascertainable, or the impersonal object must be clearly defined.

The Trustees must be identified in full name, identity particulars and addresses registered with the Registrar of Deeds

It is imperative to note that the trust deed should be signed by the Trustees before a Notary Public.[4]

What can be included in a Family Trust?

In a family trust, an individual or couple can put any property/assets of their choice, just as they would in a will. Some of the assets that can be mentioned in a family trust include but are not limited to:

ü  Houses

ü  Land

ü  Farms

ü  Livestock

ü  Motor vehicles

ü  Company shares

ü  Businesses

ü  Life policies

ü  Personal assets with sentimental value

Advantages of Trusts over Wills in Family Succession/Estate Planning

Although trusts are usually associated with wealthy people (you might have heard something of a “trust fund baby”) and/or as a means for nefarious ends such as tax evasion and under-reporting income taxes, they are a great tool when it comes to estate planning and succession.

Unlike wills, which have to be executed via public proceedings (the whole processes being of public record), trusts are an entirely private and confidential affair. The upsurge in the discourse of trusts over wills is an attestation to this.

Trusts are of course set up for different purposes, but a family trust proves to be an immensely helpful estate planning tool/mechanism. Probably the most salient feature of family trusts is that upon the death of a grantor (who in this context is a parent/spouse), a trust is exempted from estate fees and other costs related to probate.

In such event, the asset management process is not cumbersome. A family trust is a vehicle for managing the assets belonging to an individual or couple in a timeous, private, less costly manner; specifying how assets are to be distributed when that individual or couple dies.

Since a trust is not subject to probate, many are finding it to be of great preponderance as compared to wills. Probate is the entire judicial process whereby the validity of a will [as a public document] must be proved in court; it is the formal legal process that gives recognition to a will and appoints an executor for the administration of the estate. This process is subject to the oversight of the Master of the High Court.[5]

With a family trust, there is no need to go through this process of probate, and thus there is no need to pay the Master’s Fee and the Executor’s Fee. The process of probate can drag for a long time — but with a family trust, this does not happen. The distribution of assets happens forthwith, in line with the specifications of the notarial deed of trust.

In some instances, a will can be contested in court and some wills can be ruled as invalid for failure to comply[6] with the formalities prescribed in the Wills Act [Chapter 6:06]. In such a context, the process to transfer and distribute assets becomes protracted and even acrimonious as contested wills may lead to family disputes.

A family trust outlines, with unequivocal specificity, how family assets are to be invested, managed, and distributed; as well as the manner in which the proceeds will be shared. A trust also protects the assets from being followed after by creditors — since creditors cannot claim assets in a trust, when either spouse drowns in heavy debts, the assets are sheathed from any judicial process/litigation.

So next time your family contemplates how to prepare for estate planning, assure them that a family trust is a safe, reliable, effective medium to that end.

[1] J Kagan, ‘What Is a Legal Trust? Common Purposes, Types, and Structures’, Investopedia Accessed 15 March 2023

[2] Ibid.

[3] ‘The Requirements to Set up a Family Trust in Zimbabwe’ Kanokanga Law Firm Accessed 15 March 2023.

[4] ‘Benefits of setting up a family trust in Zimbabwe’ Muvingi Mugadza Accessed 15 March 2023

[5] T Muhlwa ‘Family Trusts - An Effective Vehicle to Managing Your Estate’ Mondaq. Accessed 15 March 2023.

[6] Ibid.

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