“For many years, trust arrangements in Kenya have operated with limited formalities, particularly where family property and wealth are concerned. Families have held land for future generations, set aside funds for the medical needs of relatives and managed property through arrangements based largely on mutual understanding. While these arrangements may have served their purpose, they have not always provided the legal certainty and accountability required to protect the interests of all concerned.”
On 25th September 2026, the Trust Administration Act, 2026 introduced a new legal framework for the administration of trusts in Kenya, repealing the Trustees Act and the Trustees (Perpetual Succession) Act. The new legislation seeks to consolidate and modernise the law governing trusts, with implications for trustees, beneficiaries, families and organisations that hold or administer assets in trust.
For anyone who has established a trust, been appointed a trustee or entrusted property to another person for the benefit of family members or other beneficiaries, the changes are worth understanding.
What Has Changed?
One of the key changes under the new Act concerns the formal registration of written trusts. The legislation establishes a registration framework under the Registrar of Trusts, operating within the Business Registration Service. This means that parties establishing a written trust must pay close attention to the applicable registration or incorporation requirements rather than assume that executing a trust deed is sufficient.
The Act also provides a mechanism through which a person with an interest in an unregistered trust may seek recognition by the court. However, relying on court intervention to establish the status of a trust can be costly and time-consuming. For families dealing with succession, land ownership or the distribution of an estate, ensuring that the relevant arrangements are properly documented and registered is therefore an important consideration.
The provisions on family trusts are particularly significant. The Act recognises family trusts as a vehicle for managing and preserving family wealth for present and future generations. A family trust may be established by a single person and may provide for beneficiaries who are not yet born. It is intended for the management of personal or family estates rather than the conduct of business.
The Act also clarifies that a settlor may be a beneficiary of a family trust, provided that the settlor is not its sole beneficiary. This offers greater flexibility in estate planning while allowing families to structure the management and distribution of their assets within a formal legal framework.
The Responsibilities of Trustees
The new legislation places greater emphasis on accountability and proper record-keeping. Trustees of family trusts, charitable trusts, school funds, church endowments and other trust arrangements should familiarise themselves with the obligations imposed by the Act.
These include maintaining a register of beneficial owners, keeping proper accounting records and notifying the Registrar of prescribed changes within the applicable statutory period, including changes involving trustees, enforcers and amendments to trust deeds. The Act also requires records to be retained for at least seven years after the termination of a trust.
Failure to comply with these obligations may attract administrative penalties, with the applicable amounts depending on the nature of the breach and the person responsible. More serious misconduct, including the improper use of trust property, unauthorised personal gains and dealings intended to defeat the interests of beneficiaries, may expose trustees to criminal liability. The penalties provided for serious offences include fines of up to KSh 5 million and imprisonment for up to five years, as applicable under the Act.
These provisions reinforce an important principle: trusteeship is a position of responsibility, not merely an arrangement to hold property on behalf of others. Trustees must act in accordance with their duties and the terms of the trust, maintain appropriate records and ensure that trust assets are applied for their intended purposes.
Beneficial Ownership and Transparency
The Act also introduces a more formal approach to the identification and disclosure of beneficial ownership in trusts. This is an important development in the context of Kenya’s efforts to strengthen transparency and meet its obligations relating to anti-money laundering and the prevention of illicit financial flows.
Trust arrangements can involve several parties, including the settlor, trustees, beneficiaries and persons exercising control over the trust. Without proper records, identifying the individuals who ultimately benefit from or exercise control over trust assets can be difficult.
Under the new framework, trusts are required to identify their beneficial owners, maintain the relevant information and submit it to the Registrar in accordance with the law. Changes in beneficial ownership must also be addressed through the prescribed update procedures.
The legislation provides a formal basis for access to relevant information by authorised public institutions, including those responsible for financial regulation, tax administration and the prevention of financial crime. For trustees and those establishing trusts, this means that confidentiality must be understood alongside the statutory obligations of disclosure and compliance.
Existing Trusts Have Two Years to Comply
The transitional provisions are particularly important for trusts that were established before the new law came into force. Existing trusts are given a period of twenty-four months from commencement to comply with the applicable requirements.
Assuming the Act commenced on 25 September 2026, the transition period would run to 25 September 2028. Trustees should, however, confirm the applicable commencement and transitional provisions when determining their specific compliance deadlines.
The transition period should not be treated as a reason to postpone action. Trustees need to establish whether their trusts are properly documented, whether registration or incorporation is required, whether beneficial ownership information is complete and whether their administrative practices meet the new statutory standards.
This is particularly relevant to families whose property is held under informal arrangements or where one family member holds title to property on behalf of several relatives. Such arrangements may have operated without difficulty for years, but questions can arise when a trustee dies, family relationships deteriorate or beneficiaries seek to enforce their interests.
Early compliance will help reduce the risk of disputes and avoidable legal costs.
Who Should Pay Particular Attention?
- Families holding land or inherited property
Families that rely on informal agreements or undocumented arrangements should review how their property is held and whether a formal trust structure would better protect the interests of current and future beneficiaries.
- Trustees of school, church and community funds
Those responsible for funds held for educational, religious or community purposes should assess their record-keeping, financial controls and reporting obligations. The fact that a trust is managed on a voluntary basis does not, by itself, remove the need to comply with the law.
- Charitable trusts
Organisations operating charitable trusts should review their trust deeds, objects and governance arrangements against the new statutory framework. They should also confirm whether any changes to their existing arrangements are necessary.
- Individuals preparing wills and estate plans
The new framework is relevant to anyone considering the use of a trust as part of succession or estate planning. Particular attention should be given to the trust deed, the identification of beneficiaries, the appointment and removal of trustees and the arrangements for administering trust property.
- Corporate trustees and trust agents
The Act also regulates the persons who may act as trust agents, including the specified professional categories of advocates, certified public secretaries and certified accountants. Those providing trust administration services should review the applicable eligibility requirements and ensure that their practices comply with the new framework.
What Happens to Trusts Established Under the Previous Law?
The Act makes transitional provision for trusts previously incorporated under the Trustees (Perpetual Succession) Act. These trusts are recognised under the new framework, subject to the applicable statutory provisions, and the Registrar may reissue the relevant certificates.
This is an important safeguard against unnecessary disruption to existing arrangements. However, recognition under the transitional provisions should not be confused with permanent exemption from the new requirements. Existing trusts must still consider their continuing obligations and the steps necessary to achieve compliance within the prescribed transition period.
The Way Forward
The Trust Administration Act, 2026 marks a significant development in the legal framework governing the management and preservation of wealth in Kenya. For families, charities and other organisations, it presents an opportunity to review existing arrangements and address weaknesses that may previously have gone unnoticed.
Trustees should begin by reviewing their trust deeds, confirming the status of registration or incorporation, updating beneficial ownership information and putting appropriate accounting and record-keeping systems in place. Those considering establishing new trusts should also ensure that the arrangements are properly structured from the outset.
At a time when succession disputes and disagreements over family property remain a concern, a properly constituted and administered trust can provide a useful means of protecting assets and securing the interests of future generations.
Our team assists clients in reviewing existing trust arrangements, preparing trust deeds and advising on registration and compliance requirements under the applicable law. Trustees and families who may be affected by the new legislation should seek appropriate legal advice early enough to make the necessary adjustments within the transition period.
Magdaline Muhiu is an Advocate of the High Court of Kenya, a mental health advocate and a creative writer associated with Chege Kibathi & Company Advocates LLP.
