Why You Should Consider Establishing a Family Trust in Kenya
Date: 7 May 2025
From: CM Advocates LLP – Private Wealth and Estate Planning Team
A Strategic Step for Securing Your Family’s Future
Are you looking for a structured, tax-efficient, and secure way to manage and protect your family’s assets across generations? Establishing a family trust may be one of the most strategic decisions you make for your family’s long-term well-being.
With recent legislative reforms in Kenya, family trusts have become a modern and flexible tool for private wealth management. They now offer a compelling alternative to traditional estate planning mechanisms like wills and probate.
Key Benefits of a Family Trust
-
Asset Protection
A trust is a separate legal entity, meaning assets transferred into it are legally shielded from personal liabilities, including creditors, legal claims, and even tax recovery caveats from the Kenya Revenue Authority (KRA). -
Preservation of Wealth Across Generations
Through the trust deed, a settlor can guide how assets or income should be used—safeguarding wealth from irresponsible beneficiaries, external influences, or incapacities. -
Efficient Estate Planning
Avoid the delays and costs of probate. With a trust, the transfer of assets to beneficiaries is private, confidential, and does not require court processes. -
Privacy and Confidentiality
Family trusts allow you to avoid the public nature of probate proceedings, ensuring your family’s financial matters remain private. -
Tax Efficiency
When properly structured, family trusts can provide tax benefits including exemptions from stamp duty and capital gains tax on asset transfers and potential relief on future sales. -
Support for Special Needs
Trusts can be structured to offer ongoing financial support for family members with disabilities, minors, or other dependents. -
Flexibility
You can specify conditions for distributions and manage how funds are disbursed over time, maintaining oversight and control. -
Protection from Matrimonial Claims
Assets in a trust are typically excluded from matrimonial property, providing an additional layer of protection during divorce or separation proceedings.
The Legal Framework
Family trusts in Kenya are governed by the Trustees (Perpetual Succession) (Amendment) Act, 2021 and the Perpetuities and Accumulations (Amendment) Act, 2021. These updates enable trusts to:
-
Be registered as corporate bodies with perpetual succession.
-
Own assets under the trust’s name.
-
Operate similarly to companies in terms of legal personality and management.
How to Set Up a Family Trust
-
Define Your Objectives:
Establish the purpose, structure, and beneficiaries of your trust. -
Engage a Private Wealth Lawyer:
Work with an experienced legal team to draft your trust deed and guide you on tax structuring. -
Register the Trust:
The trust is registered with the Business Registration Services (BRS). A certificate of incorporation is issued, typically within 14–60 days. -
Transfer Assets:
Properties, savings, and other assets are formally transferred into the trust, with legal and tax support to secure exemptions where applicable.
How We Can Help
At CM Advocates LLP, our Private Wealth and Estate Planning Team has vast experience assisting clients locally and internationally with structuring and registering family trusts. We provide end-to-end legal, estate, and tax advisory services tailored to your unique circumstances.
If you are considering a family trust or would like to learn more about how this could align with your long-term goals, we would be pleased to arrange a consultation at your earliest convenience.
📩 Contact us today via cmaina@cmadvocates.com to schedule a meeting or request our comprehensive family trust guide.