Online Reporter
Miriam Tose Majome
Correspondent
Trusts have become fashionable in Zimbabwe as there is a rising sense of financial self-awareness as more people accumulate assets and start thinking seriously about preserving them for the next generation.
In principle this is a positive shift.
For years, lawyers, churches, financial advisers and various “estate planning” speakers have been encouraging people to prepare for the inevitable.
Wills, family meetings, trusts, insurance, the whole mix – so the growing interest is not surprising.
But as with most things that suddenly become popular, something gets lost in translation.
Trusts are being sold as miracle solutions. Many people are walking around believing that a trust is a protective bubble that will keep property safe from greedy relatives, divorcing spouses, creditors, council rates, reality and even basic common sense.
They genuinely think that the moment they move a house into a trust, it becomes untouchable, untraceable and immune from all worldly problems.
That belief is a dangerous fantasy because trusts have their place. They are not for every family and every situation. In fact, some trusts create more conflict than they prevent. Beneficiaries often end up fighting over the very asset that was supposed to keep the family together.
These are the uncomfortable truths we often tiptoe around, sometimes because of professional courtesy, sometimes because clients do not want to hear anything that complicates their dream solution, and lawyers just want to make money.
But today we throw down the gauntlet and plain speak.
Trusts are legal arrangements, not magic boxes
A trust is simply a legal arrangement where a founder donates property for trustees to manage on behalf of beneficiaries. There is nothing mystical about it. It is not a cloak of invisibility. It is not a bunker.
The trust still exists in the real world. It interacts with the law, creditors, municipal authorities, tenants, divorcing spouses and tax authorities like anything else. Trustees can sue and be sued. They can be dragged to court over rates arrears, dodgy transfers, loans gone wrong or mismanagement.
A trust is represented by human beings; the trustees, who must answer for their decisions and any illegal acts committed in the course of running the trust.
This is why the idea that “once property is in a trust no one can touch it” is misleading.
If a debtor transfers a house into a trust to avoid execution, or a spouse dumps matrimonial property into a trust to cheat the other spouse, the courts can and do reverse those transfers. Fraud does not become lawful simply because the property is sitting under a new label. The law is very clear on that.
Setting up trusts without money
Many trusts fail because they are set up without money. This is the part most people refuse to hear. A trust without money is a burden, not a blessing. Many Zimbabwean families are being pushed into setting up family trusts when the only asset they own is a single modest house.
The intention is noble, but the outcome is often tragic.
Take the example of the Katiyo family who are just another ordinary Harare family with a very modest three-bedroomed house. They are convinced by a well-meaning lawyer that the only and best way to protect the house is to move it into a trust.
Years later, the Katiyos die, the house is falling apart, the gutters are hanging, the plumbing is a disaster, the roof is caving in, the paint is peeling, the council is threatening litigation over arrears, and there is not a cent in the trust to maintain anything.
The children, now adults with their own financial pressures, start bickering. One pays for the water reconnection. Another sends money from Ireland for repairs. Others do nothing, but collect rent and argue that they are “not obliged” to contribute because “it’s trust property.”
Eventually, they all want to sell and go their separate ways,but they cannot, because the house does not belong to them. It belongs to the trust.
What began as a gesture of protection ends as a monument to avoidable conflict. And this story is repeated across the country with frightening regularity.
Inheritance disputes
Trusts can complicate inheritance disputes, instead of simplifying them. Trustees are not ornamental positions. They hold real power and carry real responsibility. They can buy, sell, borrow, invest and make binding decisions on behalf of the trust.
They must always act in the best interests of beneficiaries.
But in the real world, trusteeship becomes a source of friction. Trustees may lack the skills to manage property, may disagree among themselves, or may simply abuse their positions. Beneficiaries may accuse trustees of mismanagement or refusing to distribute benefits. Trusts quickly become litigation factories when relationships break down.
People often set up trusts to avoid the chaos of unplanned estates, but a poorly structured trust creates even messier disputes.
Beneficiaries may not understand their rights. Some may feel entitled to occupy the house rent-free and others may demand rental income. The trustee may refuse to sell property even when it is in the beneficiaries’ best interests. Or worse, the trustee may be one of the children and start behaving like the personal owner of the asset.
A trust does not automatically guarantee fairness or peace. It simply postpones the conflict and makes it more legally complicated.
Trusts are not the only option
This point cannot be stressed enough. A trust is one tool among many. Yet many people are pushed into trusts without considering simpler alternatives. A good estate plan may include:
- A properly drafted will
- Joint ownership structures that achieve the same objective without the long-term administrative burden
- A company structure for business or rental property
- Life insurance with designated beneficiaries
- Donation inter vivos where appropriate
- Buy-sell agreements for business partners
- Clear family agreements about maintenance of shared property.
Sometimes the simplest structure is the most humane one. Not every family has the money, unity or capacity to run a trust. And there is no shame in that. The point of estate planning is to reduce conflict, not to create it.
A trust is as strong as the humans behind it
This is the truth people do not like to admit.
Trusts work beautifully for families with good governance, adequate funding and responsible beneficiaries. They fall apart when the family itself is fractured, financially stretched or held together by thin threads of politeness.
Zimbabwean families are under immense economic and social pressure. Siblings live all over the world. Others are struggling at home. Expecting them to run a trust smoothly is often unrealistic.
Trusts are not bad but they simply are not magic. When misused or misunderstood, they become a burden and source of conflict, which tears families apart. People should choose the estate planning tool that matches their reality, not the one that sounds fashionable.
Miriam Tose Majome is a lawyer and can be contacted on [email protected]
