Two families set up trusts in the same month. One names each child’s exact share; the other leaves the trustees discretion to decide who receives what, and when. Both are valid Kenyan trusts , the difference is who controls the outcomes, and that choice deserves thought.
What is a fixed trust?
In a fixed trust, the beneficiaries and their shares are fixed by the instrument. Each beneficiary knows precisely what they are entitled to, and the trustees have no choice about distribution , only about how the property is managed in the meantime. Fixed trusts offer certainty and are straightforward to administer, but they cope less well when circumstances change: a child with special needs, a beneficiary in financial difficulty, or family relationships that shift over time.
What is a discretionary trust?
In a discretionary trust, the trustees decide whether to distribute, to whom within a defined class, and in what amounts. No beneficiary has an automatic right to anything until the trustees exercise their discretion. The advantages are flexibility and responsiveness , the structure can adapt to changing needs , and discretionary interests are generally harder for third parties to reach than fixed entitlements. The trade-off is greater reliance on the trustees’ judgment, which is why the choice of trustees and a well-drafted letter of wishes matter so much in discretionary structures.
Which structure should you choose?
- Family dynamics , are needs broadly equal, or do they vary significantly between beneficiaries?
- Ages and stages , young families often benefit from discretion; adult beneficiaries may prefer certainty.
- Exposure to claims , consider how the structure should respond to a beneficiary’s creditors or marital difficulties.
- Administration , discretionary trusts require more active trustee engagement and record-keeping.
Both types are administered under the trust instrument and the Trustee Act, which can be read on Kenya Law. Our governance and advisory team advises on structuring and trustee selection, and our practice areas page describes the wider advisory work we carry out for families and businesses.
For guidance on your specific situation, contact CS Advocates LLP , call, WhatsApp, or book a confidential consultation at our Westlands, Nairobi office.