Types of Trusts & trusts formation process in Kenya explained for smart estate planning. Secure assets, avoid disputes, and Book our team today.
Introduction
A Trust is a legal relationship where one party (the trustee) holds legal title to property or assets for the benefit of another party (the beneficiary), based on the instructions of the party who created the trust (the settlor).
A Trust may be established by way of a Trust Deed which ought to be stamped and then registered under the Registration of Documents Act (Cap 285 of the Laws of Kenya). However, it is important to register/incorporate the trust under the Trustees (Perpetual Succession) Act (Cap 164 of the Laws of Kenya) for the purpose of obtaining a Separate legal entity.
As experienced trust registration lawyers in Kenya, we advise clients on the entire trust formation process, from drafting trust deeds to registration under the Trustees (Perpetual Succession) Act, ensuring compliance with estate planning and succession laws.
Incorporation of trustees – Section 3 Trustees (Perpetual Succession) Act, Cap 164 of the Laws of Kenya
Any person(s) who have lawfully constituted themselves for the purpose of forming a trust may apply to the Registrar for a Certificate of Incorporation at a fee of Kenya Shillings Ten Thousand (Kshs. 10,000).
The application shall be in writing, signed by the person(s) making it, and shall contain several particulars namely: –
- Name of the Trust
- Trust Constitution (Trust Deed/Will)
- Registered office address
- Postal address, Telephone Number and Email Address of the Trust
- Principal objects of the Trust
- Details of the Settlor(s), first Trustees and/or Enforcers of the Trust such as: Name; Postal address; Identity Card or Passport number; For Kenyan residents, Copy of PIN certificate issued by Kenya Revenue Authority; Coloured passport-sized photograph; Certificate of incorporation, in case of a body corporate; Initial assets of the trust (if applicable).
Every application for a Certificate of Incorporation shall be accompanied by an application for the registration of the certificate via Form A in the Schedule of the Land (Perpetual Succession) Regulations,1976.
The Registrar may require a declaration or evidence in verification of the statements and particulars in the application, if any, as he may think necessary or proper.
The Registrar shall within sixty days of receipt of an application for incorporation of a trust, grant or reject the application.
Where an application is rejected, the Registrar shall give written notice to the applicant stating the reason for rejecting the application.
Where an application for incorporation is approved by the Registrar, he or she may grant a certificate accordingly.
The trustees shall thus become a body corporate, and shall have perpetual succession and a common seal, and power to sue and be sued in their corporate name, to hold and acquire property belonging to, or held for the benefit of the trust.
Clients looking for trust incorporation lawyers in Kenya rely on legal professionals to prepare applications, draft trust constitutions, and ensure smooth approval by the Registrar of Documents.
Types of Trusts in Kenya
Charitable trusts – Section 3B Trustees (Perpetual Succession) Act, Cap 164 of the Laws of Kenya
Formed for the exclusive purpose of the relief of poverty, the advancement of education, religion or human rights and fundamental freedoms, or the protection of the environment or any other purpose beneficial to the general public.
It is valid if: –
- the charitable objects may be pursued in Kenya or elsewhere;
- the objects are beneficial to the general public or a section of the public;
- the trust is discretionary; and
- the trustee has power to defer distribution of the assets of the trust to any charity or other beneficiary of the trust for a period not exceeding the duration of the trust.
Our charitable trust registration services in Kenya assist philanthropists and organizations in legally structuring their giving for maximum impact while remaining compliant with Kenyan law.
Non-Charitable Purpose trust – Section 3C Trustees (Perpetual Succession) Act, Cap 164 of the Laws of Kenya
May be created for a specific purpose notwithstanding the absence of any beneficiary.
It is valid if: –
- the purpose for creation is specific, capable of fulfilment and is not illegal; and
- the terms of the trust provide for the disposition of surplus assets of the trust upon its termination.
Trust registration lawyers also guide businesses and individuals on creating non-charitable purpose trusts in Kenya for asset protection, estate planning, and specialized purposes.
Family Trust – Section 3D Trustees (Perpetual Succession) Act, Cap 164 of the Laws of Kenya
A trust, whether living or testamentary, partly charitable or non-charitable, that is registered by any person(s), whether jointly or as an individual, for the purposes of planning or managing their personal estate.
It is valid if: –
- made in contemplation of other beneficiaries, whether such intended beneficiaries are directly related to the settlor or not, or are living or not; It is important to note that, the settlor(s) may also be beneficiaries to the trust.
- made for the purpose of preservation or creation of wealth for generations; and
- it is a non-trading entity.
Family trust lawyers in Kenya assist clients to preserve wealth, manage succession, and avoid probate by registering living and testamentary trusts tailored to their estate planning needs.
Conclusion
From the above discussion, it is evident that trusts are instrumental in various ways such as: control and management of assets on behalf of beneficiaries; and charitable giving. It is important to know one’s reasons for creation of a trust so as to determine the kind of trust to create. Objectives such as: advancement of education; relief of poverty; preservation or creation of wealth for generations determine the kind of trust to be created. Further, family trusts offer several benefits such as avoidance of the probate process upon death of the settlor thus making the assets or properties to automatically pass to the beneficiaries.
As professional trust registration lawyers in Kenya, we provide comprehensive legal services in drafting trust deeds, registering charitable and family trusts, and advising on estate planning strategies to ensure clients’ assets are protected and passed on seamlessly.