Parents saving for school fees, or leaving property to young children, face the same question: who holds and manages the property until the child is grown? A trust answers that question in a way that is enforceable and transparent.
Why can’t a child simply own property directly?
Minors cannot enter into contracts in their own name, which makes holding registered land or company shares impractical. Where a parent dies, the Law of Succession Act (Cap 160) provides for a minor’s share of an estate to be held and applied for the child’s benefit, usually through a guardian or trustee. A trust formalises the same idea during a parent’s lifetime: the trustee holds the property, the child is the beneficiary, and the terms set out exactly how the property is to be used.
How does an education trust work?
The settlor transfers cash, investments, or other property to trustees, who apply the income , and capital if the instrument allows , for school fees, upkeep, and related needs. A letter of wishes can guide the trustees on preferred schools, universities, and milestones. The balance ordinarily vests in the child at an age specified in the instrument, which need not be eighteen; many parents choose a later age for capital while permitting income for education earlier.
What should parents consider when setting one up?
- Choose trustees for integrity and financial discipline, with successor trustees in place.
- Separate roles , the person caring for the child need not also control the funds.
- Decide reporting: annual accounts to an older child build trust and accountability.
- Coordinate the trust with life or education policies so proceeds flow to the right place.
The trust should also be coordinated with the family’s succession documents. If a parent dies while children are still minors, the Law of Succession Act (Cap 160) provides how their shares are held; a consistent set of documents , trust, will, and policies naming the same trustees , avoids the confusion that arises when each document points in a different direction.
Our insurance law practice regularly advises on aligning policies with trust structures, and our practice areas page sets out the wider private client work we undertake. The governing legislation, including the Trustee Act and the Law of Succession Act, can be read 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.