A business owner in Westlands wants her children to inherit the family companies and the Karen home without the family spending years in the succession registry. She has heard of family trusts, but how do they differ from a will?
What is a family trust?
A family trust is an arrangement in which trustees hold assets for beneficiaries according to a trust deed. Kenyan law recognises and provides for the registration of family trusts, including under the Trustees (Perpetual Succession) Act. A registered trust can hold land, shares and other assets in its own name, separate from the individuals behind it. Because the assets sit with the trustees rather than the individual, the estate that passes through the court on death is correspondingly smaller.
How does a trust differ from a will?
A will speaks only at death and takes effect through a court grant, with the time, publication and possibility of objection that entails. A trust holds assets continuously: it can provide for family members during the settlor’s lifetime and after death, and keep ownership structures, such as a family company, stable across generations without a court process for each transfer. Trusts also keep the details of family wealth out of public court records, which some families value.
Does a trust replace a will?
Not usually. The two do different jobs. A will deals with assets that remain outside the trust, appoints executors and guardians for minor children, and catches anything acquired late in life. A trust holds the assets the family wants managed continuously. Many estate plans use both, alongside retirement nominations and insurance policies.
What are the first steps?
Take an inventory of the assets, decide who should serve as trustees and who the beneficiaries are, and take advice on drafting, stamping and registering the trust. Trustees should be people or institutions the family can rely on, and the deed should say how they are replaced. CS Advocates LLP advises on family trusts and estate planning through our governance and advisory practice and our wider practice; the governing statutes are published on Kenya Law.
For guidance on your specific situation, contact CS Advocates LLP, call, WhatsApp, or book a confidential consultation at our Westlands, Nairobi office.