Series | Week 6
Title: AN INTRODUCTION TO TRUSTS
When planning for the future, many people immediately think of wills and inheritance. However, there’s a powerful estate planning tool that often goes overlooked — the Trust. In this article, we introduce the concept of trusts, unpack their purpose, and explain how they can be used to pro-tect and manage wealth across generations.
What Is a Trust?
A trust is a way of managing property or money so that it can benefit someone — either right now or in the future.
Here’s how it works in simple terms:
A person called the settlor creates the trust. They put their property — like land, money, or shares — into the trust and set the rules for how it should be looked after and who should bene-fit from it.
The settlor can appoint other people to help manage the trust, called trustees, or they can also be a trustee themselves. The job of the trustee is to make sure the property is managed responsibly and used for the benefit of the people the settlor has chosen — these people are called the beneficiaries.
Trustees are important because:
They help keep everything accountable — so the assets are used properly.
After the settlor passes away, the trustees continue running the trust according to the settlor’s instructions, making sure the right people benefit as planned.
So, a trust is not just about giving property away — it’s about putting a proper structure in place to protect, manage, and pass on your wealth in the way you want.
The Main Parties in a Trust
Settlor (Donor/Founder) – The person who establishes the trust and contributes assets.
Trustee(s) – The person(s) or institution appointed to manage the trust property.
Beneficiaries – The individuals or entities entitled to benefit from the trust.
Protector (Optional) – In some trusts, a protector is appointed to oversee the trustees and safeguard the settlor’s intentions.
Types of Trusts
Trusts come in many forms, depending on their purpose and structure. Some common types in-clude:
Intervivos trusts: Created during the lifetime of the settlor.
Testamentary trusts: Come into effect upon the death of the settlor, usually through a will.
Charitable trusts: Set up for philanthropic purposes.
Why Set Up a Trust?
Trusts are versatile and serve multiple objectives:
Asset Protection – Shielding assets from creditors, lawsuits, or matrimonial disputes.
Wealth Preservation – Keeping family wealth intact across generations.
Confidentiality – Unlike wills, trusts are private documents and not typically subject to public record.
Succession Planning – Ensuring smooth transition and continuity of asset management after death.
Special Needs Planning – Providing for vulnerable beneficiaries without disrupting their state benefits.
Tax Efficiency – In some cases, trusts can be used for estate duty and tax planning (subject to local laws).
Legal Recognition of Trusts in Botswana
Trusts are recognised under the Trust Property Control Act (Cap 31:03) in Botswana. The Act imposes duties on trustees, such as acting with care, diligence, and impartiality. Trustees must also register the trust with the Master of the High Court and adhere to reporting and record-keeping obligations.
Trusts are not just for the wealthy — they are powerful tools that offer control, protection, and structure to anyone interested in long-term estate planning. As laws evolve and families become more complex, the relevance of trusts continues to grow.
In the next article, we will break down how to register a trust in Botswana, including the practical steps and legal requirements involved.
