Collin Gatahwi (Advocate Cocoe), a Legal Practitioner, Conveyancer, and Notary Public, delivered this Premium Chat to the ZBIN family regarding Family Trusts.
Q: What is a Family Trust?
A family trust is an estate planning tool used to manage an individual’s or couple’s assets during their lifetime and outline how those assets are distributed after death.
Legal Framework: Governed by the Deeds Registries Act [Chapter 20:05].
Creation: Created via a Deed of Trust and registered through the Registrar of Deeds.
Requirement: Must be registered by a Notary Public (note: not all legal practitioners are Notaries Public).
Essential Elements of a Trust Deed
A valid and legally enforceable Deed of Trust must clearly identify the Founder (creator), Trustees (managers), and Beneficiaries (recipients). It must also state a lawful purpose, clearly define the trust property, outline trustee powers, specify distribution rules, include succession/amendment clauses, and feature an acceptance clause signed by all parties.
Pros and Cons of a
Family Trust
Advantages
•√Perpetual Succession: The trust continues to exist and hold assets seamlessly even if a trustee dies or becomes incapacitated.
•√Protection from Creditors: Because the trust owns the assets (not the individuals), creditors cannot claim trust property.
•√Tax Benefits: Trust property does not fall under the Deceased Estates Succession Act upon the founder’s death, avoiding standard deceased estate taxes.
•√Efficiency & Privacy: Avoids the lengthy Master of the High Court process required for Wills. Because it is contractual, the distribution of the estate remains entirely private.
•√Dispute Prevention: Helps eliminate inheritance feuds among relatives since property ownership does not change hands upon death.
Disadvantages
•Costs: Higher administration costs to set up and maintain.
•Loss of Personal Control: Once assets are transferred, they belong to the trust and are managed by the trustees. Treating trust property as personal property is considered fraud.
Key Takeaways & Misconceptions
Trusts for Single Individuals: Single individuals can set up a family trust. They can appoint a co-trustee (like a parent or sibling) and name themselves and their “unborn children” as beneficiaries. The deed can later be amended to include or substitute a spouse.
Taxation (ZIMRA): It is a misconception that all trusts are taxed. Only income-generating trusts (earning from rentals, business profits, dividends, etc.) are taxed. If profits are distributed, beneficiaries pay income tax on their share; if income is retained within the trust, the trust itself is liable for the tax.
Admin Notes*
This was a star Presentation by Advocate Cocoe and only included 40% of her presentation and this excludes Q&Answers.
Advocate Cocoe is a member of ZBIN and can be contacted on +263 77 967 4674
