The Pros and Cons of Family Trusts in Zimbabwe: Should You Use One to Protect Your Property?

You've worked hard to build your wealth. Whether it's your family home, rental properties, commercial buildings, or land, one question becomes increasingly important: How do you protect these assets for future generations?

For many Zimbabwean property owners, the answer may be a family trust.

Trusts have become increasingly popular among business owners, property investors, farmers, and high-net-worth families because they can provide long-term asset protection and simplify succession planning. However, they are not a one size fits all solution, and they come with legal, tax, and administrative responsibilities. Before transferring your property into a trust, here's what you need to know.

What Is a Family Trust?

A family trust is a legal arrangement where a person (known as the founder or settlor) transfers assets to trustees, who manage those assets for the benefit of named beneficiaries.

Instead of the property being owned personally, it is owned and administered by the trust in accordance with the Trust Deed.

A family trust can hold various assets, including:

• Residential property
• Commercial buildings
• Farms
• Vacant land
• Investment portfolios
• Shares in companies
• Cash investments

In Zimbabwe, trusts are recognised under common law, with their administration and oversight governed by legislation including the Deeds Registries Act [Chapter 20:05], the Administration of Estates Act [Chapter 6:01], and the Trust Property Control Act [Chapter 5:04], depending on the nature of the trust and its administration.

Why Do People Set Up Family Trusts?

Most families establish trusts for one or more of the following reasons:

• Protect family wealth.
• Plan for future generations.
• Simplify succession planning.
• Protect vulnerable beneficiaries.
• Hold investment property.
• Manage family businesses.
• Reduce the risk of disputes after death.

Rather than focusing on immediate ownership, trusts are designed to preserve assets over the long term.

The Advantages of a Family Trust

1. Protecting Family Wealth

A trust can help ensure that valuable property remains within the family for future generations.

Instead of transferring ownership directly to individuals, the trust continues to own the property while beneficiaries enjoy the benefits in accordance with the Trust Deed.

2. Better Succession Planning

Because the trust continues to exist after the founder's death, assets held by the trust are generally not administered as part of the founder's deceased estate, although the founder's personal rights or interests in the trust may still form part of the estate depending on the circumstances.

This can simplify succession planning for families with significant property portfolios.

3. Continuity of Property Management

If a family owns several rental properties, shopping centres, farms, or commercial buildings, the trust provides continuity.

The trustees continue managing the assets without the need to transfer ownership every time a family member dies.

This can reduce disruption for:

• Tenants.
• Employees.
• Business partners.
• Investors.

4. Protecting Minor Children

Children under the age of majority cannot always manage substantial property interests effectively.

A trust allows trustees to manage property responsibly until beneficiaries are old enough or until the conditions set out in the Trust Deed are met.

5. Privacy

Unlike wills, which become part of the deceased estate administration process, trust arrangements often provide a greater degree of privacy regarding how family assets are managed.

The Disadvantages of a Family Trust

1. Establishment Costs

Creating a properly drafted trust requires professional legal advice.

Costs may include:

• Legal fees.
• Registration costs where applicable.
• Professional drafting.
• Accounting advice.

For owners of modest estates, these costs may outweigh the benefits.

2. Ongoing Administration

A trust is not a document you file away and forget.

Trustees must:

• Hold meetings where appropriate.
• Keep financial records.
• Maintain trust assets.
• Comply with legal obligations.
• Act in the best interests of beneficiaries.

Poor administration can undermine the effectiveness of the trust.

3. Trustees Have Legal Duties

Once property is transferred into a trust, the trustees not the founder personally must administer it in accordance with the Trust Deed and the law.

Trustees owe fiduciary duties to beneficiaries and must avoid conflicts of interest.

4. Tax Considerations

Many people mistakenly believe trusts automatically reduce taxes. This is not true.

Depending on how the trust is structured and administered, property transfers and trust income may have tax consequences, including:

• Capital Gains Tax
• Income Tax.
• Stamp Duty
• Other applicable taxes and fees.

A trust should never be established solely for perceived tax advantages without obtaining specialist legal and tax advice.

5. Less Personal Control

Once assets have been validly transferred into a trust, the founder cannot simply treat them as personal property.

Trustees must act according to:

• The Trust Deed.
• Zimbabwean law.
• Their fiduciary obligations.

This separation is one of the trust's greatest strengths but also one of its biggest adjustments for founders.

Who Should Consider a Family Trust?

A trust may be appropriate for:

• Property investors.
• Farmers.
• Business owners.
• Families with multiple properties.
• Parents of young children.
• Families with beneficiaries who require long-term financial protection.
• Individuals planning for intergenerational wealth transfer.

However, someone who owns a single residential property may find that a professionally drafted will provides sufficient estate planning.

When a Trust May Not Be Necessary

A trust may not be the best option if:

• You own only one modest property.
• Your estate is relatively simple.
• The costs outweigh the benefits.
• Your objectives can be achieved through a properly drafted will and good estate planning.

Choosing the right structure depends on your circumstances not on trends.

Zimbabwe's Property Market Makes Long-Term Planning Essential

Residential and investment property continue to appreciate in value.

According to the Property.co.zw 2025 Real Estate Market Report:

• Average house asking prices increased by 14.3% year-on-year.
• Borrowdale's average asking price is approximately US$495,000.
• Mount Pleasant averages close to US$480,000.
• Investor demand remains strong across many established suburbs.

With Zimbabwe's housing backlog exceeding 1.5 million homes, quality real estate remains one of the country's most valuable long-term assets.

As wealth grows, protecting it becomes just as important as creating it.

Questions to Ask Before Creating a Family Trust

Before establishing a trust, ask yourself:

• What am I trying to achieve?
• How many properties do I own?
• Who are my intended beneficiaries?
• Do I have young children?
• Who should serve as trustees?
• What are the ongoing administrative costs?
• Have I obtained professional legal and tax advice?

The answers will help determine whether a trust is the right solution.

The Bottom Line

A family trust can be an excellent vehicle for protecting property, preserving wealth, and planning for future generations but it isn't the right choice for everyone.

The decision should be based on your financial goals, family circumstances, property portfolio, and succession objectives.

Before transferring property into a trust, consult an experienced legal practitioner, tax adviser, and financial planner to ensure the structure aligns with your long-term plans.

Property.co.zw Expert Tip

A family trust is not just a legal structure it's a long-term wealth management strategy. Before creating one, ask whether it genuinely serves your family's goals. For many Zimbabwean homeowners, a professionally drafted will may be enough. For larger property portfolios and multigenerational wealth planning, however, a well-managed trust can provide lasting protection for the assets you've spent a lifetime building.