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Introduction
By George Okenyo Omwansa
As an advocate who has worked extensively with succession, estate planning, and family wealth structures in Kenya, I have watched with great interest the introduction of the Trust Administration Bill, 2025. This proposed legislation marks a pivotal moment in Kenya’s legal landscape because it seeks to repeal both the Trustees (Perpetual Succession) Act (Cap. 164) and the Trustees Act (Cap. 167). For families who rely on trusts to protect wealth, preserve legacies, and achieve efficient succession planning, the Bill introduces a comprehensive framework that reshapes how family trusts are recognized, governed, and regulated.
The Bill’s objectives are threefold:
- To consolidate and modernize Kenya’s trust law into a single, coherent statute.
- To align Kenya’s trust regime with global standards on transparency, beneficial ownership, and anti–money laundering (AML/CTF).
- To provide a flexible legal framework for different categories of trusts, including charitable, family, pension, and purpose-driven arrangements.
Family trusts—already gaining traction in Kenya for succession planning—are perhaps the most directly impacted. Previously, many family trusts operated in a semi-formal space: valid under private law but not always fully integrated into public registers. The new Bill brings them squarely into the regulatory fold.
In this article, I will unpack the key implications for family trusts under the proposed law and highlight practical steps families should take to prepare.
What Does Recognition and Formation Mean for Family Trusts?
For the first time, family trusts are expressly recognized in legislation. The Bill requires that a family trust must be in writing and its validity will hinge on either registration or incorporation under the Act. This formalization means families can no longer rely on loosely drafted deeds or private agreements alone.
Importantly, the Bill allows the use of an authorised trust service provider’s address for registered family trusts. This is valuable where privacy, continuity, and professional oversight are priorities. For families wary of exposing their private residences in official filings, this provides a safeguard.
Should Families Register or Incorporate Their Trusts?
The Bill introduces two distinct models:
- Registered Trusts – These trusts receive a certificate marked “Registered Trustees”. However, they do not enjoy separate legal personality. In practice, this means that while trustees can manage the trust property, they do so on behalf of the trust without the trust itself being able to sue or hold property in its own name.
- Incorporated Trusts – These are granted a certificate ending with the word “Trust”. An incorporated trust becomes a body corporate with perpetual succession. It can sue, be sued, and hold property in its own name. For asset-heavy family operations—such as agricultural estates, family businesses, or real estate holdings—incorporation offers efficiency, certainty, and continuity.
The choice between registration and incorporation will depend on the family’s objectives, size of the estate, and complexity of intended transactions. In my view, families anticipating long-term, multi-generational wealth management should strongly consider incorporation.
What Happens to Property if a Family Trust Fails?
A critical element of the Bill is the clarity it provides on property safeguards and failure modes:
- If a trust registration is revoked or the trust is deemed invalid, the property reverts to the settlor or the settlor’s estate.
- Upon dissolution, if there are no directions in the trust deed, property passes to the beneficiaries. Where none are identifiable, property is transferred to the Unclaimed Financial Assets Authority.
- Assets acquired illegally are expressly excluded from trust protection.
For families, this highlights the importance of carefully drafting dissolution and substitution clauses. By planning for contingencies, families avoid the risk of losing wealth to unintended statutory processes.
How Does the Bill Reshape Governance of Family Trusts?
Governance is one of the Bill’s strongest reforms. Trustees now face both enhanced powers and stricter accountability:
- Trusteeship Limits – The Bill sets a cap on the number of trustees and introduces clear rules for appointment, resignation, and removal. This curbs potential abuse and ensures efficiency in decision-making.
- Duties of Trustees – Trustees are now bound to act with reasonable care, skill, and diligence. They must segregate trust assets, avoid conflicts of interest, and may not profit unless expressly permitted by the trust deed.
- Record-Keeping and Accounting – Family trusts must maintain detailed ledgers of assets, liabilities, transactions, charges, resolutions, and bank accounts. Key records must be filed with the Registrar, and updates submitted within 30 days. Lapses attract offences and fines.
- Disclosure Obligations – Confidentiality is no longer absolute. Trustees must comply with statutory AML/CTF requests, particularly under the Proceeds of Crime and Anti-Money Laundering Act (POCAMLA) and the Prevention of Terrorism Act.
The message is clear: trusteeship is a serious fiduciary duty, not a casual appointment.
What Does Transparency Mean for Beneficial Owners?
In line with global best practices, the Bill requires every family trust to maintain and file a register of beneficial owners. These are the individuals who ultimately control or benefit from the trust.
Any change must be lodged with the Registrar within 21 days. Failure to comply may result in administrative penalties and even disqualification of trustees. For families, this means that onboarding and Know-Your-Customer (KYC) protocols should be built into their governance systems.
This level of transparency addresses concerns of trusts being used for secrecy or illicit transfers while preserving their legitimacy as vehicles for succession planning.
Why Are Annual Returns and Change Management Important?
Under the Bill, annual returns become mandatory. Families must file updated trust information every year. Additionally, any proposed change in a trust’s name requires approval, and the Registrar has power to mandate a change if the name is misleading or undesirable.
Fines will apply for non-compliance. For family trusts, this creates a compliance rhythm similar to that of companies under the Companies Act. Families must now diarize filing deadlines to avoid penalties.
What Role Do Professional Trustees and Outsourcing Play?
The Bill professionalizes the role of trustees. If a person or family office acts as trustee “in the course of business”, they must obtain professional trustee authorization. This introduces licensing, oversight, and accountability for professional trustees.
Many families may now prefer to appoint corporate trustees or trust service providers (TSPs), who are themselves regulated. Vendor due diligence, therefore, is no longer optional but a statutory requirement.
For families, this means selecting trustees is as important as drafting the trust deed itself. Professionalization can strengthen governance but also comes with regulatory obligations.
What Immediate Steps Should Families Take?
As a practitioner, I recommend families take the following steps as soon as possible:
- Inventory Your Documents – Locate your trust deed and prepare a compliance pack, including beneficial owners’ register, property statement, and acceptance of trustees.
- Decide on the Trust Wrapper – Determine whether your trust will remain registered or transition into incorporation. This choice shapes the trust’s powers and protections.
- Implement KYC Workflows – Build systems for monitoring ownership changes (21 days) and Registrar updates (30 days). Diarize annual return deadlines.
- Review and Rewrite Key Clauses – Ensure provisions on dissolution, property fallback, trustee remuneration, and data-sharing are updated to reflect the new law.
Conclusion
The Trust Administration Bill, 2025 represents a landmark in Kenya’s journey toward modernizing trust law. By consolidating outdated statutes, aligning with global AML/CTF norms, and creating flexible categories of trusts, the Bill gives families both certainty and responsibility.
Family trusts now enjoy clearer recognition and, where desired, corporate personality. Yet, with this recognition comes obligations: disclosure of beneficial owners, meticulous record-keeping, annual filings, and professional trustee oversight. These reforms strike a balance between privacy and transparency—ensuring trusts remain attractive for estate planning while safeguarding against misuse.
For families, the time to act is now. Trusts must be revisited, updated, and aligned with the Bill to ensure continuity and compliance. With careful planning, family trusts can remain effective tools for wealth preservation and legacy building in Kenya’s evolving legal landscape.
FREQUENTLY ASKED QUESTIONS (FAQ’s)
1) Does the Bill apply to existing family trusts?
Yes. Once enacted, existing family trusts will need to be reviewed and brought into conformity with the new framework. In practice, that means confirming your trust is properly registered or incorporated, ensuring core records are complete, and preparing to file the required returns and beneficial ownership information.
2) What core records must every family trust maintain (and, where required, lodge)?
At minimum: the trust deed (and amendments), a register of trustees, a register of beneficial owners, an initial property statement, bank and transaction ledgers, minutes/resolutions, any charges over trust property, and the official service address. Where the Bill specifies filings, updates must be lodged within the statutory timelines.
3) Who counts as a “beneficial owner” of a family trust?
Any individual who ultimately owns, controls, or significantly influences the trust or enjoys its benefits. Depending on the deed, that can include the settlor (where powers are retained), trustees wielding decisive control, an enforcer/protector, and beneficiaries who exercise influence or receive substantial benefit. If beneficiaries are described as a class, record who actually exercises control or receives significant distributions.
4) How are minors or unborn beneficiaries handled?
Describe them as a class in the deed and in filings where applicable. Capture KYC information for the parent/guardian where that person exercises control on the minor’s behalf. Update the register when the beneficiary attains majority or begins to exercise control.
5) What are the consequences of late or inaccurate filings?
Administrative penalties may apply, and persistent non‑compliance can expose trustees to disqualification. Practically, banks and counterparties may refuse transactions if filings or KYC appear deficient.
6) What is the 21‑day and 30‑day change‑management rule?
Build a workflow that captures ownership/control changes within 21 days for your beneficial owners register, and submit any Registrar‑required updates within 30 days. Diarise an annual return so you keep the trust’s public record current.
7) Can we shield our home address from public records?
Yes. The Bill permits use of an authorised trust service provider’s address for family trusts—useful for privacy, continuity, and professional oversight.
8) Should we incorporate or remain a registered trust?
Consider incorporation if you expect asset‑heavy operations, multiple counterparties, or long‑term continuity (perpetual succession and the ability to sue/hold property in the trust’s own name). Simpler holding or short‑term arrangements may remain as registered trusts where a separate legal personality is unnecessary.
9) How does the Bill interact with AML/CTF obligations?
Confidentiality yields to lawful requests under Kenya’s anti–money laundering and counter‑terrorism financing laws. Expect enhanced due diligence from banks and professional firms; keep your ledgers, resolutions, and KYC current to avoid delays.
10) Does the Bill change how family trusts are taxed?
The Bill primarily addresses recognition, governance, transparency, and filings. Tax treatment continues to be governed by Kenya’s tax statutes and Kenya Revenue Authority practice. Coordinate trust structuring with tax advice tailored to your asset mix and distribution strategy.
11) What happens on dissolution or if the trust is found invalid?
If registration is revoked or the structure is invalid, property reverts to the settlor or the settlor’s estate. Where the deed is silent on dissolution, property goes to beneficiaries; if none are identifiable, it is treated as unclaimed assets under the relevant statute. Illegally acquired assets are excluded in all cases.
12) How should families choose trustees under the new regime?
Prioritise integrity, capacity, and continuity. If someone acts as trustee “in the course of business,” professional authorisation is required; many families will prefer a regulated corporate trustee or trust service provider. Conduct vendor due diligence—review licensing, service standards, fees, data‑security practices, and succession planning.
13) What if trustees or beneficiaries disagree?
Draft clear decision‑making, escalation, and dispute‑resolution clauses (mediation/arbitration) in the deed. Keep detailed minutes and resolutions; robust records reduce disputes and help courts or arbitrators understand fiduciary decisions.
14) When should we start preparing?
Now. Inventory your documents, decide on the appropriate wrapper (registered vs incorporated), implement the 21‑/30‑day workflows, and update key clauses (dissolution, trustee remuneration, data sharing for statutory requests, and admission/exclusion of beneficiaries). Early preparation lowers transition risk once the law commences.
Author Bio
George Omwansa is an Advocate of the High Court of Kenya and the founding partner of Okenyo Omwansa & Co. Advocates. His practice focuses on succession, estate planning, family trusts, and private client advisory. George helps families and family‑owned enterprises design, implement, and govern wealth structures that balance confidentiality with compliance—covering deed drafting and re‑papering, trustee onboarding and removal, beneficial‑ownership registers, risk controls, and annual filing workflows.
He regularly advises on the practical impact of evolving regulation—such as the Trust Administration Bill, 2025—translating complex statutory duties into step‑by‑step actions for trustees, enforcers/protectors, and beneficiaries. George collaborates with tax advisers, corporate administrators, and family‑business boards to align trust governance with operating companies, cross‑border assets, and multi‑generational goals.
Away from client work, George contributes to thought leadership on succession and governance and mentors junior lawyers through pro‑bono estate planning initiatives. Reach him by clicking here for consultations on trust formation, conversion (registered vs incorporated), deed reviews, or compliance audits aligned to Kenya’s AML/CTF standards.
🔗 For further guidance on setting up or reviewing your family trust under the new Bill, please reach out through Okenyo Omwansa & Co. Advocates.