Establishing a Trust in Kenya

A trust, regardless of the type as provided below, is considered invalid if it is meant to conduct or engage in anything illegal in Kenya, lacks identifiable or ascertainable beneficiary, uncertain terms making it impossible to achieve its purpose, settlor’s lack of legal capacity to create the trust; or established by duress, fraud, misrepresentation, or breach of fiduciary duty.

Whether the Kenyan Trust is bulletproof?

The aspect of it being a bulletproof trust project directly based on s 3F (3) and (4) of the Trustee (Perpetual Succession) (Amendment) No. 13 of 2021. It is not directly similar to Nevada, US but has identical characteristics on limits when the protection to the assets can be upheld or rejected by the court.

What type of trust can one establish in Kenya?

Charitable Trusts

A trust established with the sole purpose of being beneficial to the general public is classified as a charitable trust. Some of the critical areas of focus include human rights, environment, religion, education, among others. It is essential to note that a charitable trust registered in Kenya can pursue its objectives in Kenya or any other jurisdiction. It must be discretionary, and the trustee has the power to defer distribution for a period not exceeding the duration of the trust.

Family Trusts

A family trust is a type of trust that may be either living or testamentary, partly charitable or non-charitable, that is registered or incorporated to organize their personal estate. It must be made in contemplation of other beneficiaries (including the settlor, relatives or not, or dead or alive), for the preservation or creation of wealth for generations, and a non-trading entity.

Irrevocable Trusts

A trust that is established with the express power of revocation, the trust will be deemed to be an irrevocable trust. Further, if the trust provides for express power of revocation, but the settlor does not exercise the said power during his lifetime, the trust will be considered an irrevocable trust.

Non-Charitable Trusts

A non-charitable trust is a trust that exists even where it does not have a beneficiary. However, it must be for a specific purpose, the legal purpose (whether charitable or not) ought to be capable of fulfilment, and there must be an explicit provision that there will be the disposition of surplus assets of the trusts upon its termination.

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