PROCESS OF CREATING A TRUST IN KENYA

 

PROCESS OF CREATING A TRUST IN KENYA

INTRODUCTION

In Kenyan law, a trust is a legal arrangement where one party, known as the settlor, transfers ownership of assets to another party, the trustee, who manages these assets for the benefit of a third party, the beneficiary. The terms and conditions of this arrangement are typically outlined in a trust deed, which is a legally binding document.

The Trustees (Perpetual Succession) Act , provides the framework for the creation and management of trusts in Kenya. This Act defines various types of trusts, including charitable trusts, non-charitable purpose trusts, and family trusts.



Creating a trust in Kenya involves several steps. Here’s a detailed guide to help you through the process:

1.         Determine the Type of Trust:

○        Decide whether you want to create a family trust, charitable trust, or another type of trust. Each type has specific requirements and benefits.

2.         Draft a Trust Deed:

○        Engage a qualified advocate to draft the trust deed. This document outlines the terms of the trust, including the names and addresses of the trustees, the objectives of the trust, and the powers of the trustees.

3.         Sign the Trust Deed:

○        Ensure that all trustees sign the trust deed. This step is crucial for the legal validity of the trust.

4.         Pay Stamp Duty:

○        Submit the signed trust deed for stamp duty assessment and payment. This is a mandatory step before registration(In some instances there can be exemptions).

5.         Register the Trust Deed:

○        Register the trust deed under the Registry of Documents Act at Ardhi House. This registration allows the trustees to start implementing the trust's objectives.

6.         Incorporate the Trust:

○        For perpetual succession, lodge a certified copy of the trust deed and a petition for incorporation with the Minister of Lands. This process can take 7-10 months.

Creating a trust can be a valuable tool for estate planning, asset protection, and wealth preservation. If you need further assistance, consulting with a legal expert specializing in trusts is highly recommended.

While it is possible to handle some legal matters on your own, complex cases or situations with significant legal implications often require the expertise and representation of an advocate of the High Court in Kenya to ensure the best possible outcome.

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