If You Die Without a Will in Kenya: A Guide to Succession
How estates are distributed when there is no valid will, why the process is harder for families, and how a will changes things.
Read insight →A family trust is often presented as the answer to every estate-planning question. In reality it is a tool, useful in some situations and unnecessary in others. Understanding what a trust is, and when it genuinely helps, is the starting point for sound planning.
What a family trust is
A family trust is an arrangement in which a person transfers assets to trustees, who hold and manage them for the benefit of chosen beneficiaries under the terms set out in a trust document. The defining feature is the separation of legal ownership from beneficial enjoyment: the trustees own the assets in law and are bound to manage them for the beneficiaries, who enjoy the benefit. This separation is what gives a trust its potential uses, and also why it must be set up with care.
When a trust may help
A trust can assist in a number of situations. It may help with succession, allowing assets to pass to the next generation in an orderly way and potentially avoiding some of the difficulty and delay that can accompany the administration of an estate. It may help provide for beneficiaries who are young, vulnerable or not yet ready to manage significant assets directly. It may support continuity for family wealth or a family business across generations, and it can form part of a considered approach to protecting assets. For families with these concerns, a trust can be a valuable structure.
When a trust may not be needed
Equally, a trust is not always necessary. For many people, a clear and valid will, together with sound organisation of their affairs, achieves what they need without the additional structure, cost and ongoing administration that a trust involves. Setting up a trust where a simpler approach would do can create complexity for no real benefit. Honest advice sometimes means advising against a trust, and a good adviser will tell you when that is the case.
Questions to resolve first
Before establishing a trust, several questions should be worked through. What exactly are you trying to achieve, and is a trust the best way to achieve it? Which assets would the trust hold, and are they suitable to be transferred? Who would the beneficiaries be, and how should their interests be defined? Who would act as trustees, and how would they be held accountable? And what are the tax and cost implications, both at the outset and on an ongoing basis? Resolving these questions first is what turns a trust from a vague idea into an effective structure.
Trustees and governance
A trust is only as good as its trustees and its governance. Trustees take on real responsibilities and must act in the interests of the beneficiaries according to the trust’s terms and the law. Choosing the right trustees, defining their powers and duties clearly, and putting in place sensible governance are central to a trust that works as intended. Poorly chosen trustees or vague terms can turn a well-meant structure into a source of conflict.
Fitting the trust into your plan
A trust should never sit in isolation. It needs to work alongside your will and the rest of your arrangements as part of a coherent plan, so that the different elements reinforce rather than contradict one another. Done well, this gives families clarity and protection; done piecemeal, it can create gaps and conflicts.
The decision to establish a family trust deserves careful, individual advice. It can be a powerful tool for the right family in the right circumstances, and an unnecessary complication for others. We help clients work through whether a trust suits their situation and, where it does, structure it so that it genuinely serves the family’s goals.
Frequently asked questions
What is a family trust?
A family trust is a legal arrangement in which assets are transferred to trustees, who hold and manage them for the benefit of named beneficiaries according to the terms of the trust. It separates legal ownership from beneficial enjoyment.
Is a trust the right choice for everyone?
No. Whether a trust helps depends on your assets, family circumstances and goals. For some, a clear will and sound planning achieve what is needed without a trust. We advise honestly on whether a trust suits your situation.
Does putting assets in a trust remove all control?
A trust does involve transferring assets to trustees, but a well-structured trust can balance protection with appropriate input. The degree of control and flexibility should be carefully designed and understood at the outset.
Sources and further reading
- Kenya Law, the official source of Kenyan legislation and case law (kenyalaw.org).
- The Trustees Act and related law governing trusts in Kenya, which should be reviewed in its current form.
- Professional tax advice, since the tax treatment of trusts and transfers should be confirmed for each plan.
Related services
The information on this website is general in nature, is not legal advice, and does not create an advocate-client relationship. It should not be relied upon for any specific matter. Requirements may change and should be confirmed against the current law, regulations and regulator guidance before action is taken. Please contact Njau & Associates Advocates for advice on your circumstances.