What you need to know about Trusts in Kenya

Last updated on August 24th, 2024

A person or legal entity called a trustee can hold and manage wealth on behalf of one or more beneficiaries. A trust is one of the critical tools for estate planning in Kenya. The person who creates the trust is a settlor in legal terms. When the settlor transfers wealth into the trust, it becomes part of the trust available as a trust fund.

The trust founder puts terms and conditions about the trust. These terms are usually spelt out in a document called a trust deed or a letter of wishes.

A trustee has no self-interest in a trust. The trustee manages and distributes the wealth or income out of the trust.

There are four types of trusts in Kenya:

Family trusts
Charitable trusts
Non-charitable trusts
Irrevocable trusts

Trust Incorporation in Kenya Checklist

PART 1

Trust Details

Name of the Trust
Trust Constitution- (attach the Trust Deed, Will, or any other instrument forming the Trust.)
Registered office address
Name of the building/plot No.
Road/street.
District/ sub-county.
Floor/Room No.
Town.
County.
Contact address of the Trust
P.O Box.
Postal Code.
Office No.
Mobile No.
Email Address (provide an email address that has never been used on iTax).
Principle objects of the trust.

PART II

Proposed Settlor/Officers Details

Details of the Settlor(s), first Trustees and/or Enforcers of the Trust

Name.
Designation.
Postal Address.
Place and date of issue of the passport.
Nationality.
Telephone No.
Email Address.
Consent to act as a trustee/enforcer of the trust- (attach the following)
A copy of a Kenyan national identification card, alien card or passport.
A copy of the Pin certificate issued by Kenya Revenue Authority (not applicable to persons who are not Kenyan residents).
Coloured passport-sized photograph.

For a corporate body:-

Certificate of incorporation.
Copy of Pin certificate issued by Kenya Revenue Authority.
Copies of Kenyan national identification cards, alien cards, or passports of the directors.
Coloured passport-sized photographs of the directors.

PART III

Statement Of Initial Trust Assets.

Type of asset
Value of the asset

Nine Advantages of Creating a Trust in Kenya

In a trust, you save a truckload of TAXES.
Generational wealth guaranteed: a family trust can hold and protect wealth forever.
do you know of charitable causes you desire to support?
do you want to fund research for a scientific discovery or technology?
can you trust one or more of your beneficiaries addicted to drugs to inherit a huge amount of money and assets?
is a family member(s) with special needs and they cannot manage their affairs?
Medical care, age, or infirmity?
is a family member irresponsible and blows money and in need of expenditure control?
Do you remember the parable of the prodigal son in the Bible?

If your answer is yes to those seven questions, a well-set-up trust secures those beneficiaries’ entitlement.

Two Disadvantages of Creating a Trust in Kenya

In a family trust, when the founder transfers wealth into the trust, they lose that ownership. The wealth falls under the trust.
Costly management and administrative costs.

What is the cost of creating a Trust in Kenya? Contact us today to get a quote to create a Trust and our Estates lawyer will reach back to you. Or, call Kubwa & Co Advocates directly at +254728607818 or email info@kubwaadvocates.com

This Legal Tip of The Day is for general information only; the opinions and arguments here are of the author and do not reflect the official views of Kubwa & Company Advocates. Be sure to seek specific legal advice on the subject matter. If you have any questions on the same, please do not hesitate to contact kubwa@kubwaadvocates.com