Setting up a family trust isn’t just for the wealthy. It’s a strategic legal tool that allows families to manage, protect, and pass on assets with clarity, privacy, and continuity.
In Kenya, family trusts are formally recognised under the Trustees (Perpetual Succession) Act, Cap. 164,Trustees (Perpetual Succession) Act as amended by The Trustee(Perpetual Succession) (Amendment) Act. Since 2024, registration and incorporation of trusts is handled by the Business Registration Service (BRS).
DID YOU KNOW?
- Assets held in an incorporated family trust do not go through probate. Once property is settled into a trust, legal ownership vests in the trustees, not the settlor. So when the settlor dies, The property is not theirs, it is not part of the estate.
- An incorporated trust has perpetual succession and separate legal personality.
- Trusts offer privacy compared to wills which become public court documents.
- Properly structured trusts can protect assets from disputes and mismanagement.
- Some transfers into trusts may enjoy tax efficiencies under Kenyan law.
HOW IT WORKS, STEP BY STEP:
- Plan with Purpose
Start with clear objectives: who are the beneficiaries, who will manage the trust, and what assets go in. - Draft the Trust Deed
This core document outlines duties, powers, beneficiaries, duration, trustees, enforcers, and distribution rules. - Pay Stamp Duty & Register the Deed
The trust deed is assessed, stamped, and lodged, usually under the Registration of Documents Act. - Incorporate the Trust
Apply for a Certificate of Incorporation with the BRS under the Trustees (Perpetual Succession) Act. As per section 3, once approved, trustees become a corporate body, giving the trust legal personality with duties, powers, and perpetual succession.
IMPORTANT LEGAL REALITY
Did you know that a trust can exist without incorporation? Yes, but without incorporation, the trust won’t have a separate legal personality, which weakens its ability to own property and limits many of the benefits most families are after.
DID YOU KNOW THESE PRACTICAL BENEFITS?
- Avoid Probate Delays
Assets in an incorporated trust don’t have to go through the lengthy court probate process after death. So the beneficiaries get clarity sooner. - Protect Against Creditors and Disputes
Trusts offer a legal structure that can insulate assets from certain creditor claims or internal family disputes when properly drafted. - Perpetual Wealth Planning
Thanks to amendments in the law, family trusts can exist indefinitely, protecting generational wealth without arbitrary time limits. - Privacy Over Public Wills
Trusts aren’t filed in open court like wills. So, your family’s financial affairs stay where they belong. In your hands.
AND ONE MORE THING YOU REALLY SHOULD KNOW
Setting up family trusts isn’t plug-and-play. One misworded clause can cause fights, tax surprises, or unintended outcomes for your family. So, here’s the real estate-planning wisdom:
If you’re thinking about establishing a family trust, engage a qualified Advocate of the High Court of Kenya who specializes in trusts and succession law. Proper legal guidance will ensure your trust deed, registration, and incorporation comply with law, protect your intentions, and deliver the benefits you and your family expect.
NEED ADVICE?
For tailored advice on setting up or incorporating a family trust, contact
W. N. Kariuki & Co. Advocates
P.O. BOX 91-10400
NANYUKI
+254727507731
info@wnkadvocates.co.ke