HomeOpinion & AnalysisFamily trusts are not for every family

Family trusts are not for every family


Miriam Tose Majome
TRUSTS have gained popularity in recent years as more people acquire property and become more aware of the importance of protecting the assets for themselves and their dependants. Traditionally black Zimbabweans did not make written testamentary provisions but made verbal arrangements.

For years lawyers and other practitioners have been urging and teaching people to write wills and establish trusts. The uptake is very positive as more people have taken the idea of family trusts and more of them are being registered by people keen to protect their assets for their families.

While family trusts are, indeed, a good idea they are not for every family.  There is a lot of well-meaning but misleading information out there about the advantages of family trusts. However trusts are not the panacea to family  inheritance problems. Lawyers are guilty of failing to advise clients properly about

A trust is an arrangement to protect property or other interests for the benefit of third parties. The person who establishes it is called the founder or founders if more than one. Trustees are the people nominated in the trust deed to manage the

There are as many different types of trusts as there are reasons for establishing them. Family trusts are purely for the financial and social support of the founder’s family. Anyone can establish a trust and draft a trust document but it is advisable to let legal practitioners and notaries public do it. The trust document is called a Deed of Trust and is registered at the Deeds Registry Office although it is not strictly necessary to register trusts in this way.

The founder of the trust has to donate assets to the trust such as money, vehicles, businesses, company shares, farms etc. The donated property is called trust property and it is that which is administered by the trustees for the beneficiaries in accordance with the objectives the trust is set up for. Therein lies the issue. It must be said that family trusts are not for every

Family trusts are for families which have assets and enough money that can afford to sustain the trust. If the only valuable assets a family owns happens to be its modest family house it is definitely not advisable to establish a trust. A trust without money will only create more problems than it intended to solve. This is explained best by the following typical example.

Mr and Mrs Katiyo are an ordinary Zimbabwean couple. Mr Katiyo has a middle management job in a publishing house and Mrs Katiyo is a civil servant. They have five children Sam, Rita, George, Tari and Maxwell. During the subsistence of their marriage Mr and Mrs Katiyo worked hard and built a modest three-bedroomed house in Cranborne, Harare. They are proud of the house because it is the most valuable thing they own.  A lawyer comes to their church couple’s meeting and gives a talk about inheritance and the hazards of not planning. Mr and Mrs Katiyo are interested in what the lawyer said about family trusts. They later contact him and set upon establishing a trust.  They transfer their house into the trust believing it to be the best way to safeguard it for the benefit of their children after they die.

That way, avaricious relatives will not grab the house nor will one of the children sell the house and deprive the others of their inheritance. They wish for their children to always have a home to return to if it gets tough out there.

The years went by and the Katiyo children grow up  as the parents grow old and sadly pass on. The house shows scars of old age.  Everything is falling apart and needs serious attention from the broken kitchen cupboards and tiles, the separated and damaged gutters,  the caving ceiling, the peeling paint — everything is a mess or a health hazard and needs lots of money to mend. The property has accrued substantial municipal rates arrears and the council is threatening to sue. When Mr and Mrs Katiyo established the Katiyo Family Trust and transferred the house they never thought about providing for its maintenance and the lawyer did not say anything but just collected his

When the water was disconnected Sam the oldest child despite no longer living at place paid to have it reconnected, Rita the nurse in Ireland sent money to fix the decrepit plumbing system. There was always something urgently needing fixing and Sam and Rita always rose to the occasion out of goodwill.  Tari and Max continued to live in the house but did not contribute to the costs although they collected and kept rent from the tenant in the

Max lived with his two children when he returned home after his divorce. George had moved out and had nothing to do with the family or the house. He said he was not obliged to contribute anything as he benefited nothing from the

Sam and Rita benefited nothing either and soon grew weary of always being the only ones reaching into their pockets. It was after all trust property and the trust should have sustained itself. The Katiyo children’s squabbles over the house and costs of running it became serious and they dragged each other to court.

They eventually agreed to sell it and divide the proceeds and each go their separate ways but they could not as the house belonged to the trust and not to them.

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