Trusts have become indispensable in estate planning, charitable initiatives, and asset protection. In Kenya, the incorporation of a trust under statute provides the entity with corporate personality, perpetual succession, and legal capacity to hold and manage property.
Types of Trusts
The Trustees (Perpetual Succession) Act, Cap. 164 recognizes three categories:
- Family Trusts – for wealth management and succession planning;
- Charitable Trusts – for public benefit purposes such as education, poverty alleviation, health, and environmental conservation;
- Non-Charitable Trusts – for specific, lawful purposes not falling within the foregoing categories.
Parties to a Trust.
- Settlor- One who establishes the trust, determines the contents of the trust deed, and transfers assets to the trust fund.
- Trustee- They are responsible for managing the assets held within the trust as per the provisions in the trust deed and any accompanying letter of wishes.
- Beneficiaries- These are persons who receive benefits from the trust
- Protector/Enforcer- An independent party separate from the trustees who monitors, and ensures compliance with the settlor’s wishes.
Governing Statutes
The principal legislations include:
- Trustees (Perpetual Succession) Act, Cap. 164
- Trustee Act, Cap. 167
- Registration of Documents Act, Cap. 285
- Income Tax Act (Cap. 470)
- Stamp Duty Act (Cap. 480)
Incorporation Process
The incorporation of a trust is undertaken online through the Business Registration Service (BRS) portal and entails:
- Name Reservation – The proposed name must end with “Registered Trustees.”
- Preparation of Documents:
- Trust deed/constitution (registered under the Registration of Documents Act).
- Application Form TR1.
- Petition for incorporation (commissioned).
- Statement of donor funding or commitment.
- Title deeds or proof of asset ownership with supporting searches.
- Financial statements or bank statements.
- Minutes of trustee appointment.
- Curriculum vitae of trustees/employees.
- Diagram of the common seal.
- Certified copies of IDs, KRA PINs, and passport photographs of the settlor, trustees, beneficiaries, and enforcers (if any).
- Payment of Fees – Incorporation fee is KES 10,050.
- Approval and Certification – Upon approval, a certificate of incorporation is issued, conferring legal status.
The application can be done by:
- The Settlor
- Trustee
- Enforcer
- An Advocate
Frequently Raised Issues
- Revocability: Only revocable trusts may be terminated by the settlor.
- Foreign Participation: Foreigners may establish or benefit from a trust subject to compliance with Kenyan law.
- Succession of Trusteeship: The death or resignation of a trustee is addressed by provisions of the trust deed and filings with the Registrar.
- Binding nature of The letter of wishes: It is a written memorandum that provides detailed instructions on how the settlor would have managed the assets if they had retained ownership. It is not legally binding but trustees normally adhere to it unless circumstances make it disadvantageous for the beneficiaries.
Conclusion
The incorporation of trusts in Kenya provides a clear statutory mechanism for individuals and organizations to formalize estate planning, asset management, and charitable activities. By adhering to statutory requirements and maintaining compliance with ongoing obligations, settlors, and trustees can ensure the trust operates as an effective and enduring legal vehicle.
How We Can Help
At Prof. Tom Ojienda & Associates, we provide specialized legal advisory services on estate planning, succession, and trust incorporation. Our team has extensive experience guiding individuals and organizations through the establishment, registration, and management of trusts, ensuring compliance with Kenyan law while safeguarding our clients’ interests.
Please note that this article is intended for general informational purposes only and does not constitute legal advice. For tailored legal solutions, we encourage you to contact our professionals through www.proftomojiendaandassociates.com to Stay Ahead of the Game.
