{"id":8428,"date":"2025-09-02T09:16:08","date_gmt":"2025-09-02T09:16:08","guid":{"rendered":"https:\/\/okenyoomwansaadvocates.co.ke\/?p=8428"},"modified":"2025-09-02T09:55:27","modified_gmt":"2025-09-02T09:55:27","slug":"implications-of-the-trust-administration-bill-2025-on-family-trusts","status":"publish","type":"post","link":"https:\/\/okenyoomwansaadvocates.co.ke\/index.php\/2025\/09\/02\/implications-of-the-trust-administration-bill-2025-on-family-trusts\/","title":{"rendered":"Implications of the Trust Administration Bill, 2025 on Family Trusts"},"content":{"rendered":"\n

Introduction<\/h1>\n\n\n\n
\"\"<\/figure>\n\n\n\n

By George Okenyo Omwansa<\/strong><\/p>\n\n\n\n

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<\/strong>. This proposed legislation marks a pivotal moment in Kenya\u2019s legal landscape because it seeks to repeal both the Trustees (Perpetual Succession) Act (Cap. 164)<\/em> and the Trustees Act (Cap. 167)<\/em>. 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.<\/p>\n\n\n\n

The Bill\u2019s objectives are threefold:<\/p>\n\n\n\n

    \n
  1. To consolidate and modernize Kenya\u2019s trust law into a single, coherent statute.<\/li>\n\n\n\n
  2. To align Kenya\u2019s trust regime with global standards on transparency, beneficial ownership, and anti\u2013money laundering (AML\/CTF).<\/li>\n\n\n\n
  3. To provide a flexible legal framework for different categories of trusts, including charitable, family, pension, and purpose-driven arrangements.<\/li>\n<\/ol>\n\n\n\n

    Family trusts\u2014already gaining traction in Kenya for succession planning\u2014are 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.<\/p>\n\n\n\n

    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.<\/p>\n\n\n\n

    \n\n\n\n

    What Does Recognition and Formation Mean for Family Trusts?<\/h2>\n\n\n\n

    For the first time, family trusts are expressly recognized in legislation<\/strong>. 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.<\/p>\n\n\n\n

    Importantly, the Bill allows the use of an authorised trust service provider\u2019s address<\/strong> 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.<\/p>\n\n\n\n

    \n\n\n\n
    \"\"<\/figure>\n\n\n\n

    Should Families Register or Incorporate Their Trusts?<\/h2>\n\n\n\n

    The Bill introduces two distinct models:<\/p>\n\n\n\n

      \n
    1. Registered Trusts<\/strong> \u2013 These trusts receive a certificate marked \u201cRegistered Trustees\u201d<\/em>. 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.<\/li>\n\n\n\n
    2. Incorporated Trusts<\/strong> \u2013 These are granted a certificate ending with the word \u201cTrust\u201d<\/em>. 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\u2014such as agricultural estates, family businesses, or real estate holdings\u2014incorporation offers efficiency, certainty, and continuity.<\/li>\n<\/ol>\n\n\n\n

      The choice between registration and incorporation will depend on the family\u2019s 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.<\/p>\n\n\n\n

      \n\n\n\n

      What Happens to Property if a Family Trust Fails?<\/h2>\n\n\n\n

      A critical element of the Bill is the clarity it provides on property safeguards and failure modes<\/strong>:<\/p>\n\n\n\n