| Clause 2 | In this Act unless, the context otherwise requires— | The definition includes discretionary beneficiaries, reflecting trust practice. |
| “beneficiary” means a person entitled to benefit under a trust and includes a discretionary beneficiary in whose favour a discretion to distribute property held on trust may be exercised; | |
| Clause 2 | “beneficial owner” has the meaning assigned to it under section 3(1) of the Companies Act; | Cross-referencing the Companies Act promotes consistency. |
| Clause 2 | “competent authority” means the Attorney-General, any criminal investigation agency established by law, a law enforcement agency or any authority that supervises and monitors the financial sector, including, the Central Bank of Kenya, the Financial Reporting Centre and the Kenya Revenue Authority; | The definition identifies public authorities involved in regulation, investigation and supervision. |
| Clause 2 | “corporate trustee” means an entity registered in Kenya and licensed under this Act to act as a trustee; | The definition establishes the key characteristics of a corporate trustee by requiring that it be an entity registered and licensed within Kenyan boundaries. |
| Clause 2 | “designated non-financial business or professionals” has the meaning assigned to it under section 2 of the Proceeds of Crime and Anti-Money Laundering Act; | Cross-referencing the Proceeds of Crime and Anti-Money Laundering Act promotes consistency and avoids duplication. |
| Clause 2 | “discretionary beneficiary” means a person who benefits under a trust at the discretion of the trustee but does not have a fixed, vested, or contingent interest in the trust property; | The definition clearly distinguishes discretionary beneficiaries from beneficiaries with vested interests. |
| Clause 2 | “discretionary trust” means a trust where the beneficiaries or the benefits of the trust become ascertainable once the trust deed sets-out the criteria or at the discretion of the trustees; | The definition provides a clear basis for distinguishing discretionary trusts from other forms of trusts. |
| Clause 2 | “enforcer” means a person appointed as such under section 14(1); | The definition is adequate because it cross-refers to the substantive provision establishing the office. |
| “financial institution” has the meaning assigned to it under section 2 of the Proceeds of Crime and Anti-Money Laundering Act; | The cross-reference to POCAMLA promotes legislative consistency. |
| Clause 2 | “founder” means a person who provides or donates property or makes a testamentary disposition on a trust or to a trust with an intention to establish a trust and “donor” has a corresponding meaning; | The definition clearly identifies the person who contributes property with the intention of establishing a trust and appropriately recognises both lifetime and testamentary dispositions. |
| Clause 2 | “personal representative” has the meaning assigned to it under the Law of Succession Act; | The cross-reference to the Law of Succession Act is appropriate. |
| Clause 2 | “Registrar” means the person designated as the Registrar of Trusts under section 77 of this Act; | This definition is elaborate as to the establishment of the Registrar of Trusts and the office holder’s responsibilities. |
| Clause 2 | “settlor” means a person who establishes a trust in accordance with this Act and includes a founder or a donor; | The definition is comprehensive in recognising founders and donors. |
| Clause 2 | “trust” means a trust created in accordance with section 4 of this Act; | Defining a trust by reference to Clause 4 is appropriate. |
| Clause 2 | “trust agent” means an advocate of the High Court of Kenya, a certified secretary or a certified accountant authorized to act on behalf of the trust; | The definition is consistent with Clause 76. |
| Clause 2 | “trust deed” means a document that sets out the objects of a trust and the rules, regulations, terms and conditions regulating its affairs thereof; | The definition identifies a trust deed as the document governing the establishment and administration of a trust. |
| Clause 2 | “trustee” means a person, including the founder, donor or settlor of a trust, who is authorized to act as a trustee in terms of this Act, including a person whose authorization to act as a trustee is in force at the commencement of this Act; and | This definition recognises that founders or settlors may also serve as trustees. |
| Clause 2 | “trust property” or “property” means money or any other movable, immovable, corporeal or incorporeal property, including any rights, interests or claims in that property which is administered by a trustee in accordance with the provisions of a trust deed. | The definition is comprehensive, it covers tangible, intangible and proprietary interests. |
| Clause 3 | This Act shall apply to all trusts created and trustees appointed under this Act or any other written law in relation to obligations and duties of trustees. | This clause establishes the scope of application of the Act by providing that it applies to all trusts created and trustees appointed under the Act or any other written law in relation to the obligations and duties of trustees. |
| PART II — TRUST AND TRUST FORMATION | |
| Clause 4 | Creation of a trust | The clause codifies the legal requirements for creating a trust and recognises trusts established by deed, operation of law or court order. |
| A trust is created where there is a legal arrangement in terms of which ownership of property of a person is transferred, conveyed or assigned in whole or in part, to the trustee, to be administered and controlled, or disposed of in accordance with the terms of a trust deed, operation of law, or by order of the court for the benefit of the person or class of persons or for the achievement of a specific object. | |
| Clause 5 | (1) A written trust shall be valid and enforceable if it has been registered or incorporated in accordance with the terms of the trust deed and this Act. | This clause requires that registration becomes a prerequisite for enforceability of written trusts. This promotes transparency, facilitates regulatory oversight. |
| (2) Unless a written trust is registered or incorporated, no document evidencing the existence of a trust in writing shall be received as evidence in any transaction affecting the property to which the document relates, except with the consent of the court and upon such terms and conditions as the court may impose: Provided that nothing in this Act shall make any document inadmissible in any criminal proceeding. | |
| Clause 6 | (1) Without limiting the grounds on which a trust may be declared invalid under this Act or any other applicable law, a trust may be declared invalid if— | The clause clearly sets out circumstances under which a trust may be declared invalid while protecting legitimate trusts from becoming void merely because the settlor becomes bankrupt or faces creditor claims. The clause also strengthens protection against fraudulent asset shielding. |
| (a)it is created for a purpose or purports to do anything which is illegal in Kenya; | |
| (b)it has no identifiable or ascertainable beneficiary unless the trust is for non-charitable purposes; (c)it is established by duress, fraud, misrepresentation or in breach of a fiduciary duty; | |
| (d)the terms are so uncertain as to render performance impossible; (e)the settlor had no legal capacity to create the trust; or | |
| (f) the trust has not been registered or incorporated in accordance with section 5. | |
| (2) A trust shall not become void by virtue of— | |
| (a)the settlor’s bankruptcy; (b)liquidation of the settlor’s property; or | |
| (c)proceedings or a suit against the settlor by the creditors. | |
| (3) The Court may declare a trust to be void where it is proven that the trust was made for fraudulent purposes, including to evade creditors of the settlor. | |
| (4) Where a trust is created for two or more purposes of which some are lawful and others are unlawful, — | |
| (a)if those purposes cannot be separated, the trust shall be invalid; and | |
| (b)where the purposes can be separated, the Court may declare that trust is valid as to each purpose that is lawful. | |
| (5) Where a trust is partially invalid, the Court may determine the property that is trust property and the property that is not trust property. | |
| Clause 7 | (1) A trust shall be deemed to be an irrevocable trust unless the trust deed contains an express power of revocation. | The clause establishes irrevocability as the default position unless the trust deed expressly provides otherwise. |
| (2) A revocable trust shall be deemed to be irrevocable if an express power of revocation has not been exercised by the settlor during the lifetime of the settlor. | |
| Clause 8 | Types of Trusts | This clause provides a sound framework for the recognition of charitable trusts. |
| (1) A charitable trust is a trust formed for the exclusive purpose of the relief of poverty, the advancement | |
| of education, religion, human rights and fundamental freedoms, the protection of the environment or any other purpose beneficial to the general public. | |
| (2) A trust shall be deemed to be charitable if— | |
| (a)the charitable objects may be pursued in Kenya or elsewhere | |
| (b)the objects are beneficial to the general public or a section of the public | |
| (c)the trust is discretionary and | |
| (d) the trustee has power to defer distribution of the assets of the trust to any charity or other beneficiary of the trust for a period not exceeding the duration of the trust as may be provided under the trust deed. | |
| (3) A charitable trust shall be a non-trading entity. | |
| Clause 9 | (1) A non-charitable purpose trust is a trust established to fulfil a specific purpose that does not qualify | The clause recognises non-charitable purpose trusts even without identifiable beneficiaries, which is a significant development in Kenyan trust law where previously a charitable trust would not be recognized without an identifiable beneficiary. |
| as charitable under the law. | |
| (2) A non-charitable purpose trust may be created for a specific purpose notwithstanding the absence of any beneficiary. | |
| (3) A non-charitable purpose trust is valid if— | |
| (a) the purpose, whether partly charitable or not, for which the trust is created is specific, capable of fulfillment and is not illegal; and | |
| (b)the terms of the trust provide for the disposition of surplus assets of the trust upon its termination. | |
| Clause 10 | (1) A family trust is a trust, whether living or testamentary, partly charitable or non-charitable, that is registered or incorporated by any person or persons, whether jointly or as an individual, for the purposes of planning or managing their personal estate. | The clause formally recognises family trusts as estate planning vehicles and confirms that settlors may also be beneficiaries. This will encourage succession planning and wealth preservation. |
| (2) A family trust shall be— | |
| (a)made in contemplation of beneficiaries, whether such intended beneficiaries are directly related to the settle or not | |
| (b)made for the purpose of preservation or creation of wealth for generations and | |
| (c) a non trading entity. | |
| (3) Notwithstanding subsection (2), a family trust shall not be invalid for the reason that the settlor or joint settlors are also beneficiaries to the trust. | |
| Clause 11 | (1) A charitable and a non-charitable purpose trust shall have at least three natural persons as trustees or one corporate trustee. | This clause establishes appropriate governance requirements for different categories of trusts and supports effective administration. |
| (2) A family trust shall have at least one trustee. | |
| (3) A trust shall, where the trustees are natural persons, have at least one trustee who is a Kenyan citizen or a resident of Kenya, as prescribed in the Regulations. | |
| Clause 12 | Parties to a trust | This clause clarifies who may establish a trust and confirms that the settlor may also serve as trustee, beneficiary or enforcer, subject to safeguards. This increases flexibility in estate planning. |
| (1) Subject to this Act, a settlor who has the legal capacity to contract, may create a trust by providing trust property to that trust or by making a testamentary disposition to that trust. | |
| (2) A settlor shall be deemed to have the legal capacity to create a trust if, at the time he or she transfers or otherwise vests trust property in a trust, he or she is not a minor and is of sound mind. | |
| (3) A settlor may also be a trustee, a beneficiary or an enforcer but shall not be the sole beneficiary of a trust for which he or she is a settlor. | |
| Clause 13 | (1) A settlor may, subject to the terms of the trust deed and this Act, have powers to— | This clause allows settlors to retain significant control over trusts, including amendment, appointment and removal of trustees, and investment decisions. This makes trusts more attractive as wealth management tools. |
| (a) revoke, vary or amend the terms of the trust | |
| (b)direct or approve the advancement, distribution or application of income or capital of the trust property | |
| (c)give directions to the trustee in connection with the purchase, retention, sale, management, lending, pledging or charging of the trust property or the exercise of any powers or rights arising from such property | |
| (d) appoint or remove any trustee, enforcer or beneficiary or any other person who holds a power, discretion or right, or who acts in connection with the trust or with trust property; | |
| (e) appoint or remove a trust agent; or | |
| (f) restrict the exercise of any powers or discretions of | |
| a trustee. | |
| (2) The grant of powers under this section shall not confer on the settlor the right to act as a trustee. | |
| (3) In exercising the powers under this section, a settlor may delegate any of the powers to a trustee or any other person. | |
| (4) A trustee or any other person who exercises the powers granted by the settlor under subsection (3) shall comply with the terms of the trust deed and this Act. | |
| Clause 14 | (1) Subject to the terms of a trust deed, a settlor or, in the absence of a settlor, a beneficiary may appoint one or more persons as an enforcer or enforcers of a trust. | This clause introduces the office of an enforcer to oversee trust administration, improving accountability, particularly for purpose trusts. |
| (2) Where a person is appointed as an enforcer under subsection (1), that person or the trustee shall, in the specified manner, notify the Registrar within twenty-one days from the date of appointment. | |
| Clause 15 | (1) The functions of an enforcer may, subject to subsection (2), include — | The clause establishes the role of the enforcer as an independent oversight mechanism by empowering the enforcer to monitor compliance, require remedial action, report misconduct and institute legal proceedings. This strengthens accountability, particularly in purpose trusts where beneficiaries may not exist to enforce the trust. |
| (a)enforcing the terms of the trust deed; | |
| (b)inquiring into the status of implementation of the trust; (c)requiring the trustee to take remedial action, where there is breach of the terms of the trust deed; | |
| (d)reporting to the settlor or the beneficiaries any financial or other breaches by the trustees; and (e)pursuing legal action against the trustees, whether criminal or civil. | |
| (2) A person shall not perform the functions of an enforcer set out in subsection (1) if that person is also a trustee. | |
| (3) An enforcer shall not— | |
| (a)directly or indirectly profit from the enforcer's appointment; | |
| (b)cause or permit any other person to profit directly or indirectly from the enforcer's appointment; or | |
| (c)on the enforcer's own account, enter into any transaction with the trustees or relating to the trust property which may result in such profit. | |
| Clause 16 | An enforcer shall have access to any documents, trust deed, accounts or any other information necessary for the performance of his or her functions. | Granting unrestricted access to trust documents enables the enforcer to perform oversight effectively and detect breaches before beneficiaries suffer loss. |
| | |
| Clause 17 | (1) An enforcer shall cease to be an enforcer of a trust where he or she— | This clause provides certainty regarding circumstances in which an enforcer ceases to hold office and imposes notification obligations on trustees. The administrative penalties are generally reasonable. |
| (a)resigns by notice in writing to the appointing authority and the trustee; | |
| (b)is removed from the role by court; | |
| (c)is removed from the role by the appointing authority; | |
| (d)dies; | |
| (e)is appointed as a trustee of the trust; or | |
| (f) ceases to be an enforcer by virtue of the coming into effect of a provision in the terms of the trust | |
| under which the enforcer is removed from office or otherwise ceases to hold office. | |
| (2) Where an enforcer ceases to be an enforcer under subsection (1), a trustee shall notify the Registrar, in the specified manner, within twenty-one days of the cessation. | |
| (3) Where there is a change of an enforcer of a trust, a trustee shall lodge with the Registrar a copy of the notice of any change of enforcers within twenty-one days from the date of the change as prescribed by the Regulations. | |
| (4) A trustee who fails to comply with the provisions of subsection (2) or | |
| (3) of this section shall be liable to an administrative sanction of— | |
| (a)five thousand shillings, where the trustee in default is a natural person; or | |
| (b)ten thousand shillings, where the trustee in default is a body corporate. | |
| Clause 18 | An enforcer or a person acting as an officer, employee or agent of the enforcer or performing any duty on behalf of the enforcer shall not be liable to damages for anything done or omitted to be done in the discharge or of the duties of the enforcer under this Act or under the terms of the trust, unless it is proved that the act or omission constituted or arose from the person's own fraud, dishonesty or willful misconduct. | This clause protects enforcers from personal liability where they act honestly and in good faith, thereby encouraging qualified persons to accept appointment. |
| Clause 19 | (1) A beneficiary of a trust shall be— (a)identifiable by name; or (b)ascertainable by reference to— | The clause provides certainty regarding who may benefit under a trust while allowing flexibility to add or remove beneficiaries in accordance with the trust deed. |
| (i) a class; or | |
| (ii) a relationship with another person, whether living or not, at the time of the creation of the trust. | |
| (2) Subject to subsection (1), the terms of a trust may expressly provide for the addition or exclusion of a person as beneficiary or for the exclusion of a beneficiary from benefit under the trust. | |
| (3) The terms of a trust may impose an obligation or condition on a beneficiary as a requirement for receiving benefits under the trust. | |
| (4) A settlor or a trustee of a trust may also be a beneficiary of the trust. | |
| Clause 20 | Where a trust is created in favour of a class of beneficiaries — | The provision clarifies when a class closes and prevents uncertainty in administering class gifts. |
| (a)the class shall be deemed to close when it is no longer possible for any person to become a member of that class; and | |
| (b)where the interests in a class relate to income, and no member of the class exists, the income shall be accumulated and retained until the member of the class comes into being. | |
| Clause 21 | Subject to the terms of the trust deed, a beneficiary may, in writing to the trustees, disclaim his or her interest or any part of it, under the trust whether or not he or she has received any benefit from the trust. | This clause allows beneficiaries to reject benefits under a trust, preserving individual autonomy and assisting in estate planning. |
| PART III — REGISTRATION OF A TRUST | |
| Clause 22 | (1) A person who wishes to register a trust shall lodge with the Registrar an application for registration of a trust in a prescribed manner. | This clause establishes a comprehensive registration framework requiring disclosure of trust details, beneficial ownership and trust property. This significantly improves transparency and supports anti-money laundering measures. |
| (2) The application for registration of a trust under subsection (1) shall be accompanied by— | |
| (a)a trust deed; | |
| (b)the prescribed fee; | |
| (c)a copy of the register of beneficial owners as prescribed in the Regulations; | |
| (d)statement of initial trust property in the form prescribed by the Regulations; | |
| (e)statement of the initial enforcers of the trust, giving a written acceptance to act as enforcers in respect of the trust property, in the form prescribed by the Regulations; | |
| (f) a copy of the court order if the trust was created by an order of the court and | |
| (g)such other information or documents as may be prescribed by the Regulations or any other written law. | |
| (3) An application lodged with the Registrar under subsection (1) shall— | |
| (a)indicate the nature and type of trust; | |
| (b)give details on the date the trust was established; | |
| (c)state the purpose of the trust; (d)provide details of the settlor; (e)state the details and description of the beneficiaries; | |
| (f)indicate details of the initial trustees; | |
| (g)indicate details of the initial enforcers, if any; | |
| (h)state the details and description of the beneficial owners; | |
| (i) indicate the proposed registered address of the trust or the address of the trust agent; and | |
| (j)provide any other details as may be prescribed in the Regulations. | |
| (4) If the application for registration is submitted by a trust agent on behalf of the settlor or trustees, the trust agent shall include their name and address and their acceptance to act as such on behalf of the settlor or trustees. | |
| Clause 23 | (1) A trust deed shall— | This clause provides minimum mandatory contents of every trust deed, thereby improving consistency and reducing disputes. |
| (a)set out terms and conditions for creating and managing a trust; | |
| (b)set out the process of appointment and removal of trustees; | |
| (c)state that the trustees have agreed to act as trustees of the trust; (d)indicate the type of trust and its purposes; | |
| (e)specify the trust property; | |
| (f) contain information of the initial trustees, including names, addresses and their roles; | |
| (g)contain information of the trustee or enforcer, if applicable, including written acceptance to act as such; (h)where applicable, indicate whether the trustee must provide security in terms of the trust instrument or is exempted from payment of security; | |
| (i) Identify the beneficiaries by name or a clear description of the class of beneficiaries of the trust; and | |
| (j)Contain any other information that may be prescribed in the Regulations or any other written law. | |
| (2) A trust deed shall be executed by the settlor or his representative, and the trustees and the signature shall be attested by a witness who shall provide details including their occupation and postal address. | |
| Clause 24 | (1) If satisfied that an application for registration of a trust complies with the requirements of this Act, the Registrar shall register the trust. | This clause provides certainty by requiring the Registrar to issue a certificate once statutory requirements have been satisfied. |
| (2) Upon registration, the Registrar shall issue to the applicant a certificate of registration that contains— | |
| (a)name of the trust, ending with the words ‘Registered Trust’; | |
| (b)a unique identification number assigned to the trust; | |
| (c)the date of registration; | |
| (d)the type of trust; and | |
| (e)any other information as may be prescribed. | |
| (3) The Registrar shall sign the certificate of registration and authenticate it with the Registrar’s official seal or as may otherwise be prescribed in the Regulations. | |
| Clause 25 | (1) The Registrar shall refuse to register a trust under this Act if satisfied that— | This clause protects the public by preventing registration of trusts established for unlawful purposes. |
| (a)the trust is likely to be operated for an unlawful purpose or for purposes prejudicial to public peace, welfare or good order in Kenya; | |
| (b)it would be contrary to the national security or public interest for the entity to be so registered; | |
| (c)the trust does not meet the requirements stipulated under this Act; or | |
| (d)upon a charitable or non-charitable trust being subjected to a vetting process, adverse findings have been found. | |
| (2) Where the Registrar refuses a registration under subsection (1) of this section, the Registrar shall, in writing and within fourteen days of making a determination, notify the applicant of his or her decision and the reasons for the refusal. | |
| Clause 26 | The Registrar may, pursuant to a court order, revoke a registration of a trust under this Act. | This clause allows revocation only pursuant to a court order, thereby protecting trusts from arbitrary administrative action. This is an important due process safeguard. |
| Clause 27 | (1) A certificate of registration of a trust is conclusive evidence that— (a)the requirements relating to registration, under this Act have been complied with; and | This clause clarifies that registration alone does not confer separate legal personality, thereby distinguishing registered trusts from incorporated trusts. The distinction between registration and incorporation is appropriate and promotes legal certainty. |
| (b)the trust has been registered as an unincorporated trust as at the date stated on the certificate. | |
| (2) The certificate of registration shall not confer the trust legal personality. | |
| PART IV —INCORPORATION OF A TRUST | |
| Clause 28 | 28. The Registrar may, upon application, reserve a name pending incorporation of a trust. | This clause prevents duplication of names and protects the integrity of the register. We propose that the Bill should specify how long a reserved name remains valid before it lapses. This will avoid uncertainty and promote efficient administration. |
| (2) The Registrar may not reserve a trust by a name if— | |
| (a)it is identical to that of any other name appearing in the Registrar’s index of names; | |
| (b)the use of the name would contravene any law or constitute an offence; | |
| (c)the name consists of abbreviations, characters or initials not authorised by or under this Act or the Regulations made thereunder; | |
| (d)the Registrar, after taking into account the relevant criteria, is of the opinion that the name is misleading, offensive or undesirable; | |
| (e)the name appears in the Registrars index of names, that has been revoked or dissolved; or | |
| (f)the name does not meet the criteria prescribed in the Regulations. | |
| Clause 29 | 29. (1) Upon reservation of a name under section 28 of this Act, a person may apply for incorporation of a trust and the application shall— | This clause provides a detailed framework for incorporation while requiring disclosure of beneficial ownership and trust information. |
| (a)be accompanied by a copy of the reserved name of the trust; (b)indicate details of the trustees; (c)specify the nature and type of trust; | |
| (d)state the date the trust was created; | |
| (e)provide details of the settlor; | |
| (f)state the details or description of the beneficiaries; | |
| (g)state the details or description of the beneficial owners; | |
| (h)indicate the details of the enforcer, if any; | |
| (i) state the purpose of the trust; and | |
| (j) indicate the proposed registered address of the trust; or | |
| (k)in the case of a family trust, indicate the proposed registered address of the trust or the address of the trust agent. | |
| (2) An application for incorporation of a trust shall accompanied by— | |
| (a)the trust deed; | |
| (b)the prescribed fee; | |
| (c)statement of initial trust property in the form prescribed by the Regulations; | |
| (d)a copy of the register of beneficial owners; and | |
| (e)such other information or documents as may be prescribed by the Regulations or required under this Act. | |
| (3) If the application for incorporation is submitted by a trust agent on behalf of the settlor, trustees, the trust agent shall include their name and address. | |
| Clause 30 | 30. (1) Upon incorporation, the Registrar shall issue to the trust a certificate of incorporation that complies with this section and shall state— | This clause confers certainty regarding incorporation and provides documentary evidence of legal status. |
| (a)the name of the trust ending with the word “Incorporated Trust”; | |
| (b)a unique identification number; (c)the date of incorporation; | |
| and | |
| (d)the type and nature of trust. | |
| (3) The Registrar shall sign the certificate of incorporation and authenticate it with the Registrar’s official seal or as may otherwise be prescribed in the Regulations. | |
| (4) The certificate of incorporation is conclusive evidence that the requirements of this Act relating to incorporation have been complied with and the trust is duly incorporated. | |
| Clause 31 | 31. (1) Without limiting the provisions of this subsection, the Registrar shall refuse to incorporate a trust under this section if satisfied that— | The clause provides clear grounds upon which the Registrar may refuse to incorporate a trust, thereby promoting transparency, protecting the integrity of the trust registration framework, and safeguarding against the establishment of trusts for unlawful or improper purposes. |
| (a)the trust is likely to be operated for an unlawful purpose or for purposes prejudicial to public peace, welfare or good order in Kenya; | |
| (b)it would be contrary to the national security or public interest for the entity to be so registered; | |
| (c)the trust does not meet the requirements stipulated under this Act; or | |
| (d)upon a charitable or non-charitable purpose trust being subjected to a vetting process adverse findings have been found. | |
| (2) Where the Registrar refuses to incorporate a trust under this section, the Registrar shall, in writing and within fourteen days of making a determination, notify the applicant of his or her decision and reasons for the refusal. | |
| Clause 32 | 32. From the date of incorporation of a trust, the Trust shall become a body corporate by the name described in the certificate capable of— | This clause creates a separate legal personality, enabling incorporated trusts to own property, sue and be sued in their own name. |
| (a)having perpetual succession; (b)suing and being sued; (c)acquiring, owning, holding and developing or disposing of property in its name; and | This significantly enhances commercial certainty and asset protection. |
| (d)doing such other acts a body corporate may lawfully do. | |
| Clause 33 | 33. (1) A registered trust may apply to the Registrar for a certificate of incorporation in the manner prescribed in the Regulations. | This clause provides a straightforward mechanism for conversion while ensuring continuity of operations. |
| (2) A registered trust shall provide the details required in section 29 of this Act in an application for incorporation. | |
| (3) The Registrar, shall, upon being satisfied that the trust has met the requirements of this Act in relation to incorporation, issue the trust with a certificate of incorporation. | |
| (4) The certificate of incorporation shall be in accordance with the provisions of section 30 of this Act and may contain any other particulars that the Registrar may determine. | |
| (5) Upon being issued with a certificate of incorporation, the trust shall cease to exist as a registered trust and shall become a body corporate by the name described in the certificate. | |
| PART V— PROPERTY OF A TRUST | |
| Clause 34 | 34. (1) A trustee shall deal or manage the property of a trust in accordance with the terms of the trust deed, without any deviation or derogation, unless explicitly authorised by the terms of the trust deed, by a court of law or a written law. | This clause requires trustees to administer trust property strictly in accordance with the trust deed while allowing court intervention where necessary. This strengthens fiduciary accountability. |
| (2) Where a trust is revoked or declared invalid, the property under the trust shall be dealt with in accordance with the terms of the trust deed or by a determination of the court if there is no provision in the trust deed to this effect. | |
| Clause 35 | 35. Any property acquired illegally or through unlawful means shall not form part of the property of the trust and such property may be subject to recovery and forfeiture under the Proceeds of Crimes and Anti-Money Laundering Act or any other enabling law in relation to the offence committed in the process of acquiring the property. | This clause prevents illegally acquired assets from becoming trust property and subjects such assets to recovery under the Proceeds of Crime and Anti-Money Laundering Act (POCAMLA). This reinforces Kenya's anti-money laundering and asset recovery framework and discourages the use of trusts to conceal proceeds of crime. |
| PART VI— TRUSTEES | |
| Clause 36 | 36. (1) A person shall qualify to act as a trustee if that person— | This clause establishes minimum qualifications for trustees and disqualifies persons convicted of serious offences, bankrupt individuals and persons otherwise prohibited under law. It also introduces minimum standards for corporate trustees. |
| (a)is above the age of eighteen years; | These requirements enhance the integrity of trust administration and protect beneficiaries from unsuitable trustees. |
| (b)is of sound mind; | |
| (c)is not disqualified under any other written law from appointment as such; and | |
| (d)meets any other requirement as may be prescribed in the Regulations. | |
| (2) A person shall be disqualified for appointment as a trustee if that person— | |
| (a)is disqualified from acting as a director or secretary of a company in accordance with the Companies Act; | |
| (b)is disqualified from acting as a liquidator or administrator under the Insolvency Act; | |
| (c)has been declared mentally incapacitated under the Mental Health Act; | |
| (d)has been convicted of a criminal offence which attracts imprisonment for a term exceeding six months; (e)has been convicted of corruption or an economic crime; or | |
| (f)is an undischarged bankrupt or, in the case of a corporate trustee, is declared insolvent. | |
| (3) An entity shall qualify to act as a corporate trustee if that entity — | |
| (a)is a company incorporated under the Companies! Act whose main object is to provide corporate trustee services | |
| (b)is not disqualified under any other written law from appointment as such | |
| (c)is licensed to act as such under any other relevant written law or | |
| (d)meets any other requirement as may be prescribed in the Regulations. | |
| (4) A corporate trustee shall be required to have a local contact person who is a natural person and a resident of Kenya, as prescribed in the Regulations. | |
| (5) For purposes of subsection (2), the words “corruption” and “economic crime” have the meaning assigned to them under the Anti-Corruption and Economic Crimes Act. | |
| Clause 37 | 37. (1) A person may act as a trustee of a trust if appointed as a trustee— (a)under the terms of the trust deed; (b)through a court order; or | This clause formalises trustee appointments and requires notification to the Registrar within twenty-one days. It enhances transparency by ensuring that trustees expressly consent to act and that an official record of appointments is maintained. |
| (c)under the Public Trustee Act. | |
| (2) A trustee shall notify the Registrar of his or her appointment within twenty-one days of the appointment in the form prescribed in the Regulations and shall be accompanied by— | |
| (a)a written consent by the trustee to act in that capacity and be bound by the terms of the trust deed; and | |
| (b)the prescribed fee. | |
| (3) If a trustee fails to comply with subsection (2), the trustee shall be liable to pay an administrative penalty of— | |
| (a)seven thousand shillings, if the trustee in default is a natural person or | |
| (b)fourteen thousand shillings, where the trustee in default is a body corporate. | |
| Clause 38 | (1) Where a trustee has been disqualified to act as a trustee under section 36 of this Act or has otherwise ceased to be a trustee under this Act or any other applicable law, the powers of appointment of additional trustees shall be exercised in accordance with the trust deed. | This clause provides a comprehensive mechanism for replacing trustees who resign, die, become disqualified or otherwise cease to hold office. It ensures continuity of trust administration and reduces the likelihood that trusts become incapable of functioning. |
| (2) Where the trust deed does not provide for the process of appointment of additional trustees— (a)the existing trustee may appoint additional trustees; or | |
| (b)the beneficiaries or the enforcer, if any, shall make an application to court to appoint such additional trustees. | |
| (3) Where a trustee— | |
| (a)in the case of a natural person, is dead or incapable of acting; | |
| (b)in the case of a corporation, has been dissolved; | |
| (c)desires to be discharged from | |
| all or any of the trusts or powers conferred on him or her; | |
| (d)refuses to act in accordance with the trust deed; | |
| (e)has been removed under a power contained in the trust deed; or | |
| (f) in the case of a charitable trust or where a limit has been provided in the trust deed, the number goes below the minimum required number of trustees, an additional trustee may be appointed in accordance with subsection (4). | |
| (4) An additional trustee referred to under subsection (3) may be appointed by— | |
| (a)the settlor or in their absence, the enforcer, if any; | |
| (b)the person nominated for the purpose of appointing new trustees by the trust deed; | |
| (c)the surviving or continuing trustees; or | |
| (d)the Court. | |
| (5) A new trustee appointed under this section shall have the same power, authority and discretion and may in all respects act as if he or she had been appointed a trustee under the trust deed. | |
| (6) Where an incapacitated trustee is the sole beneficiary, no appointment of a new trustee in his or her place shall be made by the continuing trustees or trustee, under this section, unless leave has been given by court. (7) A trustee appointed through a court order shall— | |
| (a)have the same power, authority, and discretion and may in all respect act as if they had been appointed a trustee under the trust deed; or | |
| (b)act in accordance with the orders of the court. | |
| (8) The trustees shall notify the Registrar of the appointment of a new trustee within twenty-one days of the appointment in the form prescribed in the Regulations and shall be accompanied by— | |
| (a)a written consent by the trustee to act in that capacity and be bound by the terms of the trust deed; and | |
| (b)the prescribed fee. | |
| (9) If the trustee fails to comply with subsection (8), the trustee shall be liable to an administrative penalty not exceeding thirty thousand shillings. | |
| Clause 39 | 39. (1) Unless the trust deed provides otherwise, a trustee may resign by issuing a written notice of resignation to his co-trustees or in the case of a sole trustee, to the beneficiaries. | This clause regulates resignation, disqualification and removal from office while imposing obligations to transfer trust property and records to successor trustees. |
| (2) A resignation under subsection (1) shall have no effect if it— | The criminal sanctions for failure to surrender trust assets provide a strong deterrent against misappropriation and obstruction. |
| (a)is given to facilitate a breach of trust; or | |
| (b)is contrary to the provisions of the trust deed. | |
| (3) The court may appoint the public trustee to act as a trustee of a trust where there is no trustee capable of acting as a trustee and the trust deed does not provide for the mechanism of appointing a trustee. | |
| (4) A trustee shall cease to be a trustee of a trust immediately upon— (a)his or her removal by the Court; (b)the trustee’s resignation becoming effective; | |
| (c)being disqualified to act as a trustee under section 36 of this Act; (d)the coming into effect of a provision in the terms of a trust deed under which the trustee is removed from office or otherwise ceases to hold office; or | |
| (e)the institution or commencement of bankruptcy or insolvency proceedings against the trustee. | |
| (5) A person who ceases to be a trustee under this section shall upon cessation— | |
| (a)vest the trust property in the new or continuing trustee or the trust, in the case of an incorporated trust; and (b)surrender documents of title, accounts and records relating to the trust and held by him or her in his or her capacity as a trustee. | |
| (6) A person who fails to comply with the provisions of subsection (5) commits an offence and shall be liable, upon conviction, to a fine not exceeding five hundred thousand shillings or a prison term of one year, or to both. | |
| (7) A trustee may apply to court for orders compelling persons who have ceased to be trustees to produce anything in their possession that was in their custody by virtue of their trusteeship. | |
| (8) A trustee who resigns in order to facilitate a breach of trust shall be liable for that breach as if he or she had not resigned. | |
| (9) The trustees shall notify the Registrar of the resignation of the trustees within twenty-one days of the resignation in the form prescribed in the Regulations. | |
| (10) A trustee who fails to comply with subsection (9) shall be liable to an administrative penalty of— | |
| (a)seven thousand shillings, if the trustee in default is a natural person; or | |
| (b)fourteen thousand shillings, where the trustee in default is a body corporate. | |
| | |
| Clause 40 | 40. (1) Any person that has a legitimate interest in a trust may apply to court for the removal of a trustee and if the court is satisfied that the removal of the trustee is in the interest of the trust and the beneficiaries of the trust, the court may issue an order for removal of that trustee. | This clause allows removal of a trustee by the court or under the trust deed while requiring advance notice before removal. This protects trustees against arbitrary removal while safeguarding the interests of beneficiaries. |
| (2) Despite subsection (1), a trustee may be removed in accordance with the terms of the trust deed. | |
| (3) Before removing a person as a trustee under subsection (2), the trustee shall be given a twenty-one-day written notice of the intention to remove the trustee. | |
| (4) If a trustee is removed, the trustees of the trust shall file a notice of removal of the trustee with the Registrar within twenty-one days of such removal in the manner prescribed in the Regulations. | |
| (5) If the trustee fails to comply with subsection (4) the trustee shall be liable to an administrative penalty of— | |
| (a)seven thousand shillings, if the trustee in default is a natural person; or | |
| (b)fourteen thousand shillings, where the trustee in default is a body corporate. | |
| Clause 41 | 41. (1) Where a power or function of a trustee is vested in two or more trustees jointly and one of those trustees dies or in the case of a body corporate, is dissolved, the surviving trustees may exercise such powers or perform such functions to allow the trustee or them to maintain and preserve the trust and trust property, for a period not exceeding thirty days, pending the appointment of a new trustee in accordance with section 37 of this Act, in the place of the trustee who died or was dissolved. | This clause ensures continuity of trust administration by allowing surviving trustees to preserve trust property pending appointment of replacements. It also provides beneficiaries and enforcers with access to the court where no trustee remains. |
| (2) If a sole trustee or the last surviving or continuing trustee dies or in the case of a body corporate, is dissolved, and the trust deed does not provide for the replacement of such trustee, any beneficiary or an enforcer may apply to court to make an order for the appointment of a new trustee. | |
| (3) The trustees shall notify the Registrar of the replacement within twenty-one days of the appointment in the form prescribed in the Regulations. | |
| (4) If the trustee fails to comply with the provisions of subsection (3), the trustee shall be liable to an administrative penalty of— | |
| (a)seven thousand shillings, if the trustee in default is a natural person; or | |
| (b)fourteen thousand shillings, where the trustee in default is a body corporate. | |
| Clause 42 | 42. A change in the trustees of a trust shall not affect the existence, rights or obligations of the trust. | This clause confirms that a change of trustees does not affect the legal existence of the trust or its rights and obligations. This provides commercial certainty and protects beneficiaries, creditors and contracting parties from disruption resulting from changes in trusteeship. |
| | |
| PART VII— DUTIES AND GENERAL POWERS OF TRUSTEES | |
| Clause 43 | 43. (1) In carrying out the powers conferred to a trustee, a trustee shall exercise care, skill and diligence as it is reasonable in the circumstances, having regard to— | This clause establishes the statutory fiduciary standard expected of trustees by requiring them to exercise reasonable care, skill and diligence, act honestly and in good faith, avoid conflicts of interest, treat beneficiaries impartially and comply with the trust deed. It aligns Kenyan trust law with internationally accepted fiduciary principles and promotes accountability in trust administration. The provision also recognises that professional trustees should be held to a higher standard than lay trustees, reflecting their specialised knowledge and experience. |
| (a)the general knowledge, skill and experience that may reasonably be expected of a person carrying out the functions performed by a trustee in relation to the trust; | |
| (b)any special knowledge or experience that he or she has or holds himself or herself out as having; and | |
| (c)when he or she acts as a trustee in the course of a business or profession, any special knowledge or experience that may reasonably be expected of a person acting in the course of that kind of business or profession. | |
| (2) Despite the generality of subsection (1), a trustee shall, in exercise of his or her powers— (a)know the terms of the trust deed; (b)act in accordance with the terms of the trust instrument; | |
| (c)act honestly and in good faith; (d)hold or deal with trust property and act for the benefit of the beneficiaries or to further the permitted purpose of the trust; | |
| (e)avoid a conflict between his or her interests and the interests of the trust or any of the beneficiaries of the trust; (f)where a trust has more than one beneficiary, treat all beneficiaries impartially and in accordance with the terms of the trust instrument; and (g)not take remuneration or reward in his or her capacity as trustee except the remuneration and expenses contemplated in section 60 of this Act. | |
| Clause 44 | (1) A trustee shall execute, administer the trust and exercise his or her function in accordance with the provisions of this Act, and terms of the trust deed and only in the interest of the beneficiaries or advancement of the charitable or non-charitable purpose, as the case may be. | This clause requires trustees to act jointly and in accordance with the trust deed. Where the trust deed is silent, trustees may seek guidance from the court. Corporate trustees may also act through board resolutions or authorised officers. |
| (2) The trustees shall, at all times, act jointly in the exercise of their powers and performance of their functions in accordance with the terms of the trust deed. | This promotes collective decision-making and ensures trustees do not exercise significant powers unilaterally unless permitted by the trust deed. |
| (3) Where the trust deed does not provide for the manner in which the trustees shall exercise their powers and perform their functions relating to decision making, amendment of the trust deed, dissolution of a trust or variation of an entitlement under the trust, the trustees may make an a application to court for guidance or for any such orders as the court may deem fit in the circumstances. | |
| (4) A corporate trustee may— | |
| (a)act in connection with a trust by a resolution of its board of directors; or (b)by resolution, appoint an officer or employee or a committee of officers or employees or both, to act on its behalf in connection with the trust. | |
| (5) A corporate trustee shall be required to lodge with the Registrar a notice of appointment of any person in subsection (4)(b) within twenty-one days of such appointment. | |
| (6) If the corporate trustee fails to comply with subsection (5) the corporate trustee shall be liable to an administrative penalty of fifty thousand shillings. | |
| Clause 45 | Subject to the terms of the trust deed, a trustee shall not— | This clause reinforces the fiduciary nature of trusteeship by preventing trustees from profiting personally from their office except where authorised by the court or the Act. |
| (a)derive, directly or indirectly, any profit from his or her trusteeship; (b)cause or permit any other person to derive any profit from his or her trusteeship; or | This strengthens public confidence and protects beneficiaries against conflicts of interest. |
| (c)on his or her own account, enter into any transaction with his or her co-trustees relating to the trust property, which may result in any drawing of profit, except– | |
| (i) with the approval of the Court; or (ii)as permitted by the provisions of this Act. | |
| Clause 46 | 46. (1) A trustee shall, subject to the terms of the trust deed and the provisions of this Act, preserve the value of the trust property vested in him or her. | This clause imposes a statutory duty to preserve trust property and creates significant criminal penalties where trustees dispose of trust assets in a manner that frustrates the purposes of the trust. |
| (2) A trustee shall not dispose off trust property or any part of it in such a manner as to frustrate or adversely affect the purpose of the trust and the interest of the beneficiaries. | The provision offers protection for beneficiaries and reinforces trustee accountability. |
| (3) If a trustee fails to comply with subsection (2) each of the trustees commits an offence and is liable on conviction— | |
| (a)if the offender is a natural person, to a fine not exceeding five million shillings or an imprisonment of five years or to both; and | |
| (b)if the offender is a body corporate, to a fine not exceeding twenty million shillings. | |
| Clause 47 | 47. (1) A trustee shall keep trust property separate from the trustee's own property and separately identifiable from other property of which he or she is a trustee. | The clause requires trustees to keep trust property separate from their personal assets and to ensure that trust accounts and investments are clearly identifiable.This significantly reduces the risk of asset mixing, fraud and disputes over ownership. |
| (2) A trustee shall— | |
| (a)indicate clearly in the books of the trust the trust property which he or she holds in his or her capacity as trustee; | |
| (b)ensure that any account or investment of a trust kept by a financial institution is identifiable as a trust account or trust investment; and (c)in the case of trust property other than property referred to in paragraph (b), make such property identifiable as the trust property in the prescribed manner. | |
| Clause 48 | 48. (1) Every trustee shall keep adequate, accurate, and up-to-date records of the trust and all matters relating to the administration of the trust. | This clause establishes comprehensive record-keeping obligations covering trust property, beneficial ownership, financial records, amendments, trustee appointments and foreign trust information. These obligations improve transparency, facilitate regulatory oversight and assist beneficiaries in enforcing their rights. |
| (2) The information referred to in the records shall include— | |
| (a)the information relating to the settlor, each trustee including foreign trustees if any, each enforcer, each beneficiary, and each beneficial owner as prescribed in the Regulations; | |
| (b)information relating to a trust agent of the trust; | |
| (c)the trust deed and any other documents that contain terms of the trust; | |
| (d)the certificate of registration or incorporation; | |
| (e)any amendment of a trust deed and details of its effect on the trust property; | |
| (f) records of the trust property that identify the assets, liabilities, income and expenses relating to the trust property and beneficial ownership of the trust property; | |
| (g)any foreign trust administered by the trustees, including— | |
| (i)details of the foreign trust such as the settlors, trustees, beneficiaries, protectors or enforcers, if any; (ii)information on the beneficial owners of the foreign trust; | |
| (iii) property of the trust within Kenya; and | |
| (iv)records of transactions that have any connection with Kenya; | |
| (h)all transactions, advisory communications and matters relating to trust accounts including trust investments; | |
| (i)prescribed details relating to financial institutions and reporting institutions— | |
| (i) with which the trust has business relationships with and the nature of that business relationship; | |
| (ii) which the trust uses as agents to perform any of the trustee’s functions relating to the trust property; and | |
| (iii) from which the trust obtains any services in respect of the trustee’s functions relating to the trust property; (j) any written contracts entered into during the tenure of the trustee; (k)any records of resolutions of the trustees made during tenure of the trustee; | |
| (l) any management records and books of accounts prepared during the tenure of the trustee; | |
| (m) documents of appointment, removal and discharge of trustees, including any court orders appointing or removing trustees; | |
| (n)any reports of material irregularities and how the trustee dealt with those material irregularities; | |
| (o)a register of charges and security rights created under the Movable Property Security Rights Act or any other law; and | |
| (p)any other document necessary for the administration of the trust. | |
| (3) The trustees shall ensure that the records are kept for at least seven years from— | |
| (a)the date of termination or dissolution of the trust; or | |
| (b)the date they cease being trustees of a trust. | |
| (4) A trustee shall lodge with the Registrar a copy of any amendment to the trust deed or the list of assets within twenty-one days after making the amendment. | |
| (5) A trustee who fails to comply with subsection (4) shall be liable to an administrative penalty of— | |
| (a) seven thousand shillings, if the trustee in default is a natural person; and | |
| (b)fourteen thousand shillings, if the trustee in default is a body corporate. | |
| Clause 49 | 49. (1) The trustees shall not use or disclose their trust information except— | This clause balances confidentiality with legitimate access to information by beneficiaries, enforcers, settlors (where authorised) and competent authorities. It supports anti-money laundering enforcement while preserving trust confidentiality. |
| (a)upon written request of— | |
| (i) an enforcer; | |
| (ii)a beneficiary, subject to the terms of the trust deed; or | |
| (iii) a settlor, if such power is specifically reserved under the trust deed; | |
| (b)in order to comply with the Proceeds of Crime and Anti-Money Laundering Act; | |
| (c)in order to comply with the Prevention of Terrorism Act; | |
| (d)in order to comply with a court order; or | |
| (e)in order to comply with any other written law. | |
| (2) The trustees shall provide full and accurate information required in subsection (1) within fourteen days of receipt of the request. | |
| (3) Where a trustee fails to comply with the requirements under this section, each trustee who is in default, commits an offence and upon conviction is liable— | |
| (a)if the offender is a natural person, to a fine not exceeding one million shillings or to imprisonment for a term not exceeding two years or to both; and | |
| (b)if the offender is a body corporate, to a fine not exceeding three million shillings. | |
| Clause 50 | (1) A trustee may, at their discretion, make payments to a parent or guardian of a beneficiary who is a minor for the purposes of the maintenance, education or benefit of the minor from income arising from the property of the trust for which the minor is entitled. | This clause allows trustees to make payments to parents or guardians for the maintenance, education and welfare of minor beneficiaries while permitting accumulation of undistributed income. The provision gives trustees practical flexibility in administering trusts for children. |
| (2) Any income not otherwise applied in accordance with subsection (1) may be accumulated and paid to the beneficiary upon the attainment of the age of eighteen years. | |
| Clause 51 | 51. A trustee may, subject to the provisions of this Act or the terms of the trust deed, take possession, control, maintain, repair or improve trust property. | This clause empowers trustees to preserve and improve trust property, enabling active rather than passive management of trust assets. This assists trustees in protecting and enhancing the value of trust property. |
| | |
| Clause 52 | 52. (1) A trustee may delegate his or her functions if permitted by this Act or by the terms of the trust deed. | This clause recognises that trustees may appoint professional managers and investment advisers while retaining overall responsibility for the administration of the trust. |
| (2) In exercising the power under subsection (1), the trustee may— (a)delegate the management of the trust property to, and appoint, a manager who the trustee reasonably considers to be competent and qualified to manage the trust property; | |
| (b)delegate the power to invest trust property to, and appoint an investment manager who the trustee reasonably considers to be competent and qualified to invest the trust property; and | |
| (c)authorise any such manager or person to retain any commission or payment usually payable for services of the description rendered. | |
| Clause 53 | 53. Subject to the terms of the trust deed and the duties of the trustee under this Act, a trustee may, without the consent of any beneficiary, appropriate trust property in or towards satisfaction of the interest of a beneficiary in such manner and in accordance with such valuation as he or she considers fit. | This clause allows trustees to allocate trust property towards a beneficiary's entitlement without obtaining beneficiary consent. This provides flexibility in distributing assets. |
| | |
| Clause 54 | (1) Where a trustee is authorised by the trust deed or by law to pay or apply capital money subject to the trust for any purpose or in any manner, the trustee shall have and shall be deemed always to have had the power to raise the money required by sale, conversion, calling in, leasing or mortgage of all or any part of the trust property for the time being in their possession. | This clause provides trustees with broad powers to sell, mortgage or lease trust property where authorised while protecting purchasers acting in good faith. It facilitates efficient management of trust assets. |
| (2) Where a trust for a sale or a power of sale of a property is vested in a trustee, he or she may sell or concur with any other person in selling all or any part of the property either subject to prior charges or not, and either together or in lots, by public auction or by private contract, subject to any such conditions respecting title or evidence of title or other matter as the trustee thinks fit, with power to vary any contract for sale, and to buy in at any auction, or to rescind any contract for sale and to resell, without being answerable for any loss. | |
| (3) A trustee may lease out trust property on terms that are favourable to the trust. | |
| (4) Notwithstanding anything to the contrary contained in a trust deed, subsection (1) does not apply to trustees of property held for charitable purposes. | |
| (5) No sale made by a trustee shall be impeached by a beneficiary upon the grounds that any of the conditions subject to which the sale was made may have been unnecessarily depreciatory unless it also appears that the consideration for the sale was thereby rendered inadequate. | |
| (6) No sale made by a trustee shall, after the execution of the conveyance, be impeached as against the purchaser upon the ground that any of the conditions subject to which the sale was made may have been unnecessarily depreciatory, unless it appears that the purchaser was acting in collusion with the trustee at the time when the contract for sale was made. | |
| (7) No purchaser, upon any sale made by a trustee, may make any objection against the title upon any of the grounds specified in this section. | |
| Clause 55 | 55. Where a trustee is authorised by the trust deed, or by law to pay or apply capital money subject to the trust, the trustee shall have power to raise the money required by charging all or any part of the trust property for the time being in possession. | This clause permits trustees to raise capital by creating security over trust assets where authorised. |
| | This gives trustees flexibility in financing trust obligations. |
| | |
| Clause 56 | 56. A trustee shall distribute the trust property in accordance with the trust deed or this Act. | This clause requires trustees to distribute trust property strictly in accordance with the trust deed or the Act. This reinforces the trustee's fiduciary duty. |
| | |
| Clause 57 | 57. A trustee may sue or be sued in his or her capacity and may settle any action or claim brought by or against the trustee or in any way relating to the trust or the trust property. | This clause provides procedural clarity and facilitates efficient dispute resolution. |
| | |
| Clause 58 | 58. (1) A trustee may, subject to the provisions of this Act and the terms of the trust deed, by a power of attorney, delegate for a period not exceeding three years, the performance of any trust or function vested in him or her as trustee, alone or jointly. | This clause allows trustees to temporarily delegate functions through a power of attorney while retaining legal responsibility for the acts of the done. This ensures continuity where trustees are temporarily unavailable. |
| (2) A power of attorney under this section is renewable in accordance with the terms of the trust deed for a further period of three years. | |
| (3) A trustee who delegates a function by the power of attorney under this section shall only delegate that power to a natural person. | |
| (4) For the purposes of this section, a trustee who delegates a function by the power of attorney under this section shall be referred to as the “donor” and the person to whom the function is delegated shall be referred to as the “donee”. | |
| (5) Without prejudice to any applicable law, within twenty-one days of giving power of attorney under this section, the donor shall give a written notice or as may be prescribed to— | |
| (a) every other person who, under the terms of the trust deed, has power, alone or jointly, to appoint a new trustee; | |
| (b)every co-trustee; and | |
| (c)the Registrar. | |
| (6) The notice under subsection | |
| (5) shall state— | |
| (a)the date of commencement and duration of the power of attorney; (b)the name and address of the donee; | |
| (c)the reason for giving the power of attorney; and | |
| (d)the functions delegated. | |
| (7) Any information that may be prescribed in the failure to comply with subsection (5) or (6) shall not invalidate anything done by the donee. | |
| (8) The donor is bound by and liable for all acts and omissions of the donee, done or purportedly done under the power of attorney as if they were his or her own acts and omissions. | |
| (9) The donee shall not delegate any of the delegated powers under the power of attorney. | |
| (10) Where a trustee fails to comply with the provisions of subsection (5), each trustee who is in default, commits an offence and on conviction is liable— | |
| (a)if the offender is a natural person, to a fine not exceeding five hundred thousand shillings or to imprisonment for a term not exceeding two years or to both; and | |
| (b)if the offender is a body corporate, to a fine not exceeding two million shillings. | |
| Clause 59 | 59. A trustee may insure any property which is subject to the trust against risks of loss or damage due to any event and pay the premiums out of the trust funds. | This clause authorises trustees to insure trust assets against loss or damage using trust funds. This promotes prudent risk management and protects beneficiaries against avoidable financial loss. |
| | |
| PART VIII — REMUNERATION, INDEMNITY AND LIABILITY OF A TRUSTEE | |
| Clause 60 | (1) A trustee may, in respect of the execution of his or her official duties, receive remuneration as authorised by— | This clause recognises that professional trustees should be fairly compensated for their expertise while preserving the fiduciary nature of trusteeship. |
| (a)the terms of the trust deed; | |
| (b)the consent in writing of every beneficiary; | |
| (c)an order of the court; or | |
| (d)any other written law. | |
| (2) A trustee may pay from the trust property and may reimburse himself or herself from the trust property, for all expenses and liabilities properly incurred in connection with the trust— (a)in accordance with the terms of the trust deed or any other agreement; or (b)with the approval of the enforcer, co-trustees or the beneficiaries. | |
| Clause 61 | 61. (1) Subject to the provisions of this Act and the terms of a trust deed, a trustee who commits or is party to a breach of trust is liable for— | This clause establishes the circumstances in which trustees are personally liable for breach of trust. Overall, the clause promotes accountability while recognising that trustees should only be held responsible for breaches within their knowledge or control. |
| (a)any loss or depreciation in value of the trust property resulting from the breach; and | |
| (b)any profit which would have accrued to the trust had there been no breach. | |
| (2) A trustee shall not set off a profit accruing from one breach of trust against a loss or depreciation in value resulting from another. | |
| (3) A trustee is not liable for a breach of trust committed by another person prior to his or her appointment. | |
| (4) A trustee is not liable for a breach of trust committed by a co-trustee, unless— | |
| (a)the trustee becomes aware or ought to have become aware of the commission of such breach or of the intention of his or her co-trustee to commit a breach of trust; and | |
| (b)the trustee actively conceals such breach or such intention or fails within a reasonable time to take proper steps to protect or restore the trust property or prevent such breach. | |
| (5) Where two or more trustees are liable in respect of a breach of trust, they shall be liable jointly and severally. | |
| (6) A trustee who becomes aware of a breach of trust to which subsection (3) applies shall take all reasonable steps to have the breach remedied. | |
| Clause 62 | 62. (1) A trust deed shall not— | This clause prevents trust deeds from excluding or limiting a trustee's liability for fraud, dishonesty, bad faith or other serious misconduct. It protects beneficiaries by ensuring that trustees remain accountable for fundamental breaches of their fiduciary obligations. The provision prevents trust instruments from being drafted in a manner that effectively shields trustees from responsibility for serious wrongdoing. |
| (a)limit or exclude the trustee’s liability for any breach of trust arising from the trustee's dishonesty, willful negligence; or misconduct or gross | |
| (b)give a trustee any indemnity against the trust property for liability for any breach of trust arising from the trustee's dishonesty, willful misconduct or gross negligence. | |
| 2) Subsection (1) shall apply to a trust created before or after the commencement of this Act. | |
| (3) The beneficiaries may— (a)relieve a trustee of liability for any breach of trust; or | |
| (b)indemnify a trustee against liability for any breach of trust done in good faith. | |
| (4) Subsection (3) shall not apply if a beneficiary— | |
| (a)is a minor or person who has been declared to be of unsound mind under the Mental Health Act; | |
| (b)does not have full knowledge of all the material facts; or | |
| (c)is improperly induced by the trustee to act under subsection (3). | |
| Clause 63 | (1) A trust shall keep— | The clause requires every trust to maintain key governance documents, including its certificate of incorporation or registration, trust deed, amendments, trustee records and other prescribed documents.Maintaining complete records will help facilitate regulatory oversight and assist trustees in demonstrating compliance. |
| (a)a certificate of incorporation issued under this Act; | |
| (b)a register of prescribed information relating to each settlor, trustee, beneficiaries, enforcers and beneficial owners; | |
| (c)a copy of any statement and notices lodged with the Registrar under this Act; | |
| (d)a copy of the trust deed and any amendment thereto; | |
| (e)a list of trust property; | |
| (f) a register of charges and security rights created under the Movable Property Security Rights Act; and (g)any other documents that the Registrar may, from time to time, require to be kept. | |
| (2) A trust shall keep the documents in subsection (1) for a minimum period of seven years. | |
| (3) A trust and each trustee that fails to comply with this section commits an offence and is liable on conviction— | |
| (a)if the offender is a natural person, to a fine not exceeding five hundred thousand shillings; and | |
| (b)if the offender is a body corporate, to a fine not exceeding two million shillings. | |
| Clause 64 | (1) Every trust shall keep such accounting and other records as may be prescribed in the Regulations to— (a)show and explain the accounting transactions; | This clause requires trusts to maintain accounting records and other prescribed financial information. Proper accounting enables trustees to demonstrate prudent management of trust assets, assists beneficiaries in monitoring administration and supports regulatory oversight. Accurate financial records also facilitate audits, tax compliance and investigations where allegations of mismanagement arise. |
| (b)disclose with reasonable accuracy the financial position of the trust; (c)enable income and expenditure account and a balance sheet to be prepared, from time to time, that gives a true and fair view of the state of affairs of the trust; and | |
| (d)comply with the prescribed financial accounting standards. | |
| (2) A trust shall retain its accounting records for not less than seven years after completion of the matters to which they relate. | |
| (3) A trust shall keep its accounting records in a manner that can be open to inspection as provided for under this Act. | |
| (4) If a trust fails to comply with this section, the trustee commits an offence and is liable upon conviction— | |
| (a)if the offender is a natural person, to a fine not exceeding one hundred thousand shillings; and | |
| (b)if the offender is a body corporate, to a fine not exceeding five hundred thousand shillings. | |
| PART IX — BENEFICIAL OWNERS OF A TRUST | |
| Clause 65 | (1) Every trust shall compile and keep a register of its beneficial owners. | This clause requires trusts to identify and maintain accurate information on their beneficial owners. It enhances transparency by ensuring that the natural persons who ultimately own, control or benefit from a trust can be identified. |
| (2) A trust shall enter in the register of beneficial owners’ information relating to the beneficial owners as prescribed in the Regulations. | |
| Clause 66 | (1) A trust shall lodge with the Registrar a copy of the register of beneficial owners referred to under subsection (1). | The clause requires trustees to establish and maintain a register containing prescribed particulars of beneficial owners. A central register promotes effective governance by ensuring that ownership information is readily available for regulatory purposes and assists in demonstrating compliance during inspections or audits. |
| (2) All trusts incorporated before the commencement of this Act shall lodge with the Registrar a copy of the register of beneficial owners within twenty-four months of coming into force of this Act. | |
| (3) The Registrar may, on the application of the trustee or for any other reason the Registrar deems fit, extend the period referred to in subsection (2). | |
| (4) A trustee who fails to comply with the provisions of this section shall be liable to an administrative penalty of— | |
| (a)ten thousand shillings, if the trustee in default is a natural person; and | |
| (b)twenty thousand shillings, if the trustee in default is a body corporate. | |
| Clause 67 | (1) A trust shall update any changes to the beneficial ownership of the trust and shall lodge with the Registrar a copy of the changes to its register of beneficial owners within twenty-one days after making the change. | This clause requires trustees to submit beneficial ownership information to the Registrar. The provision enhances oversight by ensuring that relevant information is available to regulatory authorities rather than being retained solely within the trust. |
| (2) A trustee who fails to comply with provisions of this section shall be liable to an administrative penalty of— | . |
| (a)ten thousand shillings if the trustee in default is a natural person; and | |
| (b)twenty thousand shillings if the trustee in default is a body corporate. | |
| Clause 68 | Every trust shall keep records of its beneficial owner’s information for at least seven years from the date which a person ceases to be a beneficial owner. | A seven (7) year retention period is generally appropriate because it balances regulatory needs with practical record management. |
| Clause 69 | The Registrar shall give a directive to a trust that is in breach of this Part, specifying— | The clause creates offences for failing to maintain, file or update beneficial ownership information, or for knowingly providing false or misleading information. The provision is intended to encourage compliance and deter deliberate concealment of ownership information. |
| (a)the statutory requirement of which the trustee is in breach; | |
| (b)the action that the trustee is required to take; | |
| (c)the timelines within which the trust should comply; and | |
| (d)the consequence for failure to comply with the directive by the Registrar. | |
| (2) The Registrar shall, where the trustees fail to comply with the directive issued under subsection (1), issue a notice, addressed to the trustees, that upon the expiry of thirty days, the trustees may be disqualified. | |
| (3) Where the trustees fail to comply within the time prescribed in subsection (2), the Registrar shall publish in the Gazette an intention to have the trustees disqualified from acting as trustees of the trust. | |
| (4) At the end of the period specified in the gazette notice under subsection (3), the Registrar may, unless cause to the contrary is shown by the trustees, disqualify the trustees for a maximum period of three years and Gazette the names of the disqualified trustees. | |
| (5) Any person dissatisfied with the decision of the Registrar to disqualify a trustee under subsection (4) may appeal to court for such orders as the court may deem expedient. | |
| PART X — POWERS OF THE COURT IN RELATION TO VESTING ORDERS | |
| Clause70 | 70. (1) A court may issue a vesting order in relation to property of a trust where— | This clause empowers the Court to make vesting orders transferring trust property where it is impracticable or impossible for trustees to effect the transfer themselves. The provision ensures that trust administration is not frustrated by technical or procedural obstacles and enables beneficiaries to enjoy their rights without undue delay. |
| (a)the trust does not have any person capable of acting in relation to the trust property or | |
| (b)the court appoints a trustee in relation to a trust where the trust did not have any trustee or | |
| (c) the court deems fit to issue such orders. | |
| (2) A vesting order under subsection (1) shall have the same effect as if the persons who would have had the powers to execute any document, had duly executed any document required to effect the transfer of the property. | |
| (3) The court may, in any case where it has powers to issue vesting orders, direct or appoint a person to execute any document required for the transfer or conveyance of the property of a trust. | |
| Clause 71 | Where a minor is beneficially entitled to any property, the court may, with a view to the application of the capital or income thereof for the maintenance, education or benefit of the infant, make an order appointing a person to convey or transfer the property. | The provision ensures that a minor's beneficial interest is not frustrated because the minor lacks legal capacity to deal with the property. It also enables the Court to intervene where necessary to protect the welfare and financial interests of children |
| PART XI — PROVISIONS RELATING TO THE CHANGE OF NAME, FILING OF ANNUAL RETURNS AND APPOINTMENT OF TRUST AGENT | |
| Clause 72 | (1) A trust may, on application to the Registrar, change its name as may be prescribed in the Regulations. | This clause establishes a clear administrative procedure through which a trust may change its registered name without affecting its legal identity. It provides continuity by confirming that a change of name does not alter the trust's legal rights, obligations or pending legal proceedings. The provision is beneficial because trusts may need to change their names following restructuring, rebranding, merger of family trusts or to avoid confusion with another entity. |
| (2) On receiving an application of change of the name of the trust and on being satisfied that the new name complies with the requirements of this Act, the Registrar shall enter the new name on the register in place of the former name. | |
| (3) Upon registering the new name, the Registrar shall issue a certificate of change of name to the trust. | |
| (4) A change of a trust’s name shall have effect from the date on which the certificate of change of name is issued. | |
| (5) The change of name shall not affect any rights or obligations of the trust or invalidate any legal proceedings by or against it. | |
| (6) Any legal proceedings that might have been continued or commenced against it by its former name may be continued or commenced against it by its new name. | |
| Clause 73 | (1) The Registrar may direct a trust to change its name if it has been registered or incorporated by a name that is the same as or, in the opinion of the Registrar, is— | This clause empowers the Registrar to require a trust to change its name where it duplicates or closely resembles another registered or reserved name, or where it contravenes the Act or Regulations. The provision protects the integrity of the register, prevents public confusion and reduces the likelihood of disputes arising from misleading or deceptive names. The offence provisions encourage compliance with the Registrar's directives. |
| (a)too similar to a name appearing at the time of the registration or incorporation in the Registrar's index of names; | |
| (b)too similar to a name that has been reserved; or | |
| (c)contravenes the provisions of this Act or the Regulations made hereunder. | |
| (2) In giving a direction under subsection (1), the Registrar shall require the trust to comply with the direction within the time specified in the directive. | |
| (3) If the trust fails to comply with a direction given to it under this section, the trust and each trustee who is in default, commits an offence and shall be liable on conviction— | |
| (a)if the offender is a natural person, to a fine not exceeding five hundred thousand shillings; and | |
| (b)if the offender is a body corporate, to a fine not exceeding two million shillings. | |
| (4) Any person with a legitimate interest may, in writing, apply to the Registrar to give a direction to a trust, to change its name on any of the grounds specified under subsection (1). | |
| Clause 74 | (1) A trust dissatisfied with the decision by the Registrar to issue a directive may apply to court for remedy. | This clause gives trusts the right to challenge the Registrar's directive before the Court. This promotes accountability by ensuring that administrative decisions are subject to judicial oversight. It also protects trusts from arbitrary or unreasonable decisions affecting their identity. |
| (2) In considering an application under subsection (1), the Court may take into consideration the effect of sustaining similar names in the index of registered names held by the Registrar. | |
| Clause 75 | 75(1) A trust shall file its annual returns with the Registrar within thirty days of the anniversary of its registration or incorporation under this Act. | The annual filing requirement is appropriate and promotes regulatory oversight. The administrative penalty encourages timely filing without immediately resorting to criminal sanctions. |
| (2) The annual returns referred to | |
| under subsection (1) shall contain information prescribed in the Regulations. | |
| (3) If a trust fails to comply with the requirements of subsection (1), the trust or any trustee of the trust in default is liable to pay to the Registrar an administrative penalty of five hundred shillings for each year of default. | |
| Clause 76 | (1) A trust agent is a person who has been appointed by the trustee to offer services to a trust including— | This clause formally recognises the role of trust agents in trust administration. Trust agents may assist with trust formation, regulatory compliance, filing statutory documents and providing a registered office. Restricting certain trust agency functions to advocates, certified public secretaries and certified public accountants promotes professionalism and protects the public from unqualified service providers. The record-keeping and disclosure obligations strengthen transparency and assist competent authorities in investigations. |
| (a)trust formation and set up including offering advisory services, preparing registration or incorporation documents and ensuring the trust complies with the relevant laws and regulations; | |
| (b)providing a registered office address for a family trust; or (c)lodging statutory documents on behalf of the trust. | |
| (2) A trustee shall notify the Registrar of any appointment or termination made of a trust agent appointed for the purposes of lodging statutory documents on behalf of a trust or appointed to provide address or keep records on behalf of the trust within twenty-one days of appointment. | |
| (3) A trust agent appointed for purposes of subsection | |
| (2) shall be an advocate of the High Court of Kenya, a Certified Secretary or a Certified Accountant: Provided that nothing in this section shall be construed as permitting an unqualified person to draw documents required to be drawn by an advocate under the Advocates Act. (4) A trust agent shall keep records of all transactions with the trust for a period of not less than seven years from the time they cease acting as a trust agent of the trust. | |
| (5) A trust agent shall, upon request by a competent authority, disclose such information within fourteen days of such a request. | |
| PART XII—REGISTRAR AND REGISTER OF TRUSTS | |
| Clause 77 | (1) There shall be a Registrar of Trusts which shall be an office within the Business Registration Service. | This clause establishes the Office of the Registrar of Trusts within the Business Registration Service and provides for the appointment of the Deputy Registrar and Assistant Registrars. It also permits the Registrar to delegate functions while ensuring that delegated acts are deemed to be acts of the Registrar. The provision creates a clear institutional framework for the administration of the Act and supports efficient service delivery by allowing administrative functions to be performed through delegated officers. |
| (2) The Registrar of Trusts shall be responsible for the setting up of the registry and maintenance of the Register of Trusts as required under this or any other law. | |
| (3) There shall be a Deputy Registrar of Trusts and such other Assistant Registrars of Trusts as may be necessary for the proper performance of the functions of the Office. | |
| (4) The Registrar may authorise the Deputy Registrar or an Assistant Registrar to perform and exercise such functions and powers as the Registrar may from time to time specify. | |
| (5) Functions and powers of the Registrar performed or exercised in accordance with an authority conferred under subsection (4) shall be deemed to have been performed or exercised by the Registrar. | |
| Clause 78 | (1) The Registrar shall keep a Register of trusts. | This clause establishes the Register of Trusts, prescribes the information to be maintained, requires the retention of records of dissolved trusts for seven years and permits electronic record management. It also specifies the persons and institutions to whom information may be disclosed. The clause strengthens transparency, improves record management and facilitates regulatory oversight. |
| (2) The Register shall contain— | |
| (a)the information relating to trusts that is contained in documents lodged or filed with, or delivered to, the Registrar under this or any other Act; and | |
| (b)certificates of registration and incorporation of trusts issued by the Registrar. | |
| (3) The Registrar shall keep records of dissolved trusts for at least seven years. | |
| (4) The Registrar shall record and keep the information contained in documents lodged with the Registrar in such form (including electronic form) as may be prescribed in the Regulations. | |
| (5) The Registrar shall ensure that all records kept by the Registrar are in such form as will enable all the information contained in the records to be readily retrieved for inspection and copied. | |
| (6) If the records are kept in electronic form, the Registrar shall ensure that they are capable of being reproduced in hard copy form. | |
| (7) The Registrar shall perform such other functions conferred on the Registrar by this Act or any other law. (8) The Registrar may disclose the information maintained in subsection (2)— | |
| (a)to the trustees of a trust, enforcer, beneficiary or settlor where the settlor has reserved powers under the trust deed; | |
| (b)to competent authorities upon written request or any other means as the Registrar may specify; | |
| (c)to self-regulatory bodies regulating or supervising for money laundering, terrorism financing and proliferation of weapons of mass destruction; | |
| (d)to any person or institution designated as a reporting entity under the Proceeds of Crime and Anti-Money Laundering Act; | |
| (e)to any other person permitted by any written law in Kenya; or | |
| (f)where the Court orders such information to be disclosed. | |
| Clause 79 | (1) The Registrar may issue a directive to an existing trust to provide information that is required to be kept by the Registrar under this Act and is not available in relation to the trust. (2) The directive requiring an existing trust to provide information shall stipulate the timelines within which to comply with the notice and shall indicate all the information required to be furnished with the Registrar. | This clause empowers the Registrar to require trusts to provide information that is missing from the Register. Where trustees fail to comply, the Registrar may issue notices, publish the intended disqualification in the Gazette and ultimately disqualify trustees from acting for up to three years. |
| (3) The Registrar shall, where the trustees fail to comply with the directive issued under subsection (2), issue a notice, addressed to the trustees that upon the expiry of thirty days, disqualification. the trustees may be gazetted for disqualification (4) Where the trustees fail to comply within the time prescribed in subsection (3), the Registrar shall publish in the Gazette an intention to have the trustees of the trust disqualified from acting as trustees of the trust. | |
| (5) At the end of the period specified in the notice under subsection (4), the Registrar may, unless cause to the contrary is previously shown by the trustees, disqualify the trustees for a maximum period of three years and Gazette the names of the disqualified trustees. | |
| Clause 80 | 80. The Registrar may require any document to be lodged under this Act to be lodged electronically subject to such conditions, if any, as the Registrar may impose from time to time. | Electronic filing is likely to improve efficiency, reduce processing time, lower administrative costs and make trust administration more accessible. |
| Clause 81 | 81. The Registrar shall have an official seal for the authentication of documents in connection with the performance of the Registrar’s functions. | The provision supports the integrity and authenticity of certificates, extracts and other official documents issued by the Registrar. |
| Clause 82 | (1) A trustee may apply to the Registrar for rectification of the register, in respect of which an entry in a register— | This clause allows trustees to apply for correction of omissions, inaccuracies or errors in the Register. It also empowers the Registrar to rectify errors on his or her own initiative while requiring notice to affected persons and preserving the right of appeal to the High Court. Importantly, the clause confirms that rectification cannot be used to alter the substantive contents of the trust deed. |
| (a)has been omitted; | The provision improves the accuracy of the Register while protecting procedural fairness. |
| (b)is incorrect; or | |
| (c)has been included in error. | |
| (2) Upon receipt of the application under subsection (1), the Registrar may require the applicant to produce such documents or furnish such information as the Registrar | |
| deems necessary in order to determine whether the register should be rectified. | |
| (3) The Registrar shall give notice of that application to such other person as Registrar may identify being a person who appears to the Registrar to be concerned or to have an interest in the trust. | |
| (4) Upon expiry of the period prescribed under the notice in subsection (3), the Registrar may proceed to rectify the register where no objection is received from persons notified in subsection (3). | |
| (5) The Registrar may, without an application being made under subsection (1), rectify the register where, in the view of the Registrar an entry— | |
| (a)has been omitted; | |
| (b)is incorrect; or | |
| (c)has been included in error: Provided that the Registrar shall consider fair administrative action before rectifying the register. | |
| (6) A person aggrieved by the decision of the Registrar under this section may appeal to the High Court for determination. | |
| (7) Nothing in this section shall be construed as permitting the rectification, amendment, or alteration of the substantive content of the trust deed. | |
| Clause 83 | (1)There shall be prescribed fees payable to the Registrar in respect of— | This clause provides for fees payable to the Registrar and authorises the Registrar to determine fees where they are not prescribed. It also establishes the framework for managing revenue received by the Registry in accordance with the Public Finance Management Act. The provision supports the financial sustainability of the Registry while ensuring accountability in the management of public funds. |
| (a)the performance of a function imposed on the Registrar by this or any other Act; or | |
| (b)the provision by the Registrar of services or facilities for a purpose connected with the performance of any of the Registrar's functions under this Act; | |
| (c)the receipt of documents lodged with the Registrar for registration or incorporation under this or any other Act; and | |
| (d)the provision of copies of documents or parts of documents forming part of the Register. | |
| (2) In respect of the performance of functions, or the provision of services or facilities, by the Registrar— | |
| (a)for which fees are not provided for by the Regulations; or | |
| (b)in circumstances other than those for which fees are provided for by Regulations, the Registrar may determine from time-to-time what fees, if any, are chargeable. | |
| (3) The Registrar shall be responsible for ensuring that— | |
| (a)fees received by the Registrar; (b)such moneys as may accrue to, or vest in the Registry in the course of the exercise of its powers or the performance of it functions under this Act or any other written law; | |
| (c)such monies may be payable to the Registry pursuant to this Act or any other written law; | |
| (d)such gifts as may be donated to the to the Registry pursuant to this Act or any other written law; | |
| (e)such money as may be appropriated by Parliament for the Registry pursuant to this Act or any other written law; and | |
| (f)money from any other source granted, donated or lent to the Registry, are managed or utilised for the purposes of this Act in accordance with the Public Finance Management Act. | |
| PART XIII— DISSOLUTION OF A TRUST | |
| Clause 84 | (1) On application by the trustee of a trust, the Registrar may dissolve a trust. (2) An application for dissolution of a trust is effective only if— | This clause establishes the statutory procedure for voluntary dissolution of a trust. It empowers the Registrar to dissolve a trust upon application by the trustee where the trust has fulfilled its purpose, where its purpose has become impossible to achieve, or where dissolution has been ordered by the Court. |
| (a)the purpose of the trust has been fulfilled in accordance with the trust deed; | The requirement for publication of a Gazette notice and a three (3) month waiting period provides creditors, beneficiaries and other interested persons with an opportunity to object before the trust is dissolved. The clause also preserves liabilities incurred before dissolution and the Court's jurisdiction to liquidate the trust where necessary. The provision promotes orderly termination of trusts while safeguarding the interests of persons who may be affected by the dissolution. |
| (b)the trustee demonstrates that it is impossible to achieve the purpose of the trust in accordance with the terms of the trust deed; or | |
| (c)a court has ordered that the trust be dissolved. | |
| (3) An application under this section shall be— | |
| (a)in the prescribed form; | |
| (b)made on behalf of the trust by— | |
| (i) the trustees accompanied by a resolution, outlining the reasons and confirming that all conditions for dissolution as set out in the trust deed have been met; or | |
| (ii)the settlor, where such powers have been reserved under the trust deed; or | |
| (c)made in compliance with a court order; and | |
| (d)accompanied by any other information as may be prescribed in the Regulations. | |
| (4) The Registrar may not dissolve a trust under this section until after three months from the date of the publication of a notice in the Gazette— | |
| (a)stating that the Registrar may exercise the power under this section in relation to the trust; and | |
| (b)inviting any person to show cause why the trust should not be dissolved. (5) Subject to subsection (4), the Registrar shall publish in the Gazette, a notice that the trust has been dissolved. | |
| (6) On publication of the notice under subsection (5), the trust shall be deemed dissolved. | |
| (7) Notwithstanding the provisions of subsection (6)— | |
| (a)any liability incurred by a trustee of the trust shall continue to accrue to that trustee and may be enforced as if the trust had not been dissolved; and | |
| (b)nothing in this section shall affect the power of the Court to liquidate a trust which is dissolved under this section. | |
| Clause 85 | (1) An applicant may, at any time before a trust is dissolved under section 84 of this Act, withdraw an application for dissolution. | The provision gives trustees flexibility where circumstances change before dissolution is completed and promotes transparency by informing the public that the dissolution process has been discontinued. |
| (2) Upon receipt of the notice of withdrawal under subsection (1), the Registrar shall – | |
| (a) Notify the trust that the application to dissolve the trust has been withdrawn; and | |
| (b) Where a notice of intention to dissolve the trust has been publishes, publish a notice in the Gazette indicating that the application to dissolve has been withdrawn | |
| Clause 86 | (1) The Registrar may restore the name of a trust to the Register if satisfied that the dissolution of the trust is as a result of a mistake of the Registrar. | This clause empowers the Registrar to restore a dissolved trust to the Register where the dissolution resulted from the Registrar's own mistake. It excludes cases where the mistake resulted from false or misleading information supplied by the applicant. The provision enables administrative errors to be corrected without requiring court proceedings, thereby reducing costs and delays. |
| (2) For purposes of subsection (1), “a mistake of the Registrar” excludes a mistake that is made on the basis of wrong, false or misleading information given by the applicant in connection with the application for dissolution of the name of the trust from the Register. | |
| (3) The Registrar shall act within a reasonable time after identification of a mistake to have the name of the trust restored in the register. | |
| (4) The Registrar may restore the name of a trust to the Register by publishing in the Gazette, a notice declaring the restoration and which shall take effect on the date of publication of the notice. | |
| Clause 87 | (1) An application may be made to the Court to restore the name of a trust that has been dissolved. | This clause gives the Court jurisdiction to restore a dissolved trust upon application by trustees, beneficiaries or any other person with a legitimate interest. The provision ensures judicial oversight where administrative restoration is unavailable or inappropriate and protects legitimate interests that may be affected by dissolution. |
| (2) An application under subsection (1) may be made by— | |
| (a)the trustee; | |
| (b)beneficiaries of the trust; or | |
| (c)any person who would appear to the Court to have a legitimate interest in the trust. | |
| Clause 88 | (1) Where the name of a trust is restored to the Register under this Act, the trust shall be deemed to be in existence as if its name had not been dissolved and shall maintain the same legal status as before the dissolution. | This clause provides that, once restored, a trust is deemed to have continued in existence as though it had never been dissolved. It also relieves the trust from liability for filing obligations that arose during the period when it was dissolved. |
| (2) The trust shall not be liable for any liability arising from an obligation to file any document with the Registrar during the time within which it was dissolved. | The provision protects the continuity of the trust and prevents unfair penalties arising from a period when the trust legally ceased to exist. |
| | |
| Clause 89 | (1) Upon dissolution of a trust, the property held by the trust or the trustees shall be dealt with in accordance with the provisions of the trust deed or applicable law. | his clause provides that trust property shall be dealt with in accordance with the trust deed and, where the trust deed is silent, the Court shall determine the appropriate distribution. |
| (2) Where the trust deed does not have provisions in relation to the property in the event of dissolution, the Court shall make a determination on how the property shall be dealt with. | The provision respects the intentions of the settlor while ensuring that property is not left without legal direction where the trust deed does not address dissolution. |
| | |
| PART XIV — MISCELLANEOUS PROVISIONS | |
| Clause 90 | (1) Any filing required to be made with the Registrar under this Act may be filed electronically. | The provision modernises trust administration by reducing reliance on paper records, improving accessibility and facilitating faster service delivery. |
| (2) Any record required to be kept by the Registrar or any other person under this Act may be kept in electronic form. | |
| (3) The Registrar is under no obligation to keep the originals of documents lodged in electronic form so long as the information contained in them has been recorded in the Register. | |
| (4) The Registrar may not certify copies of records provided in electronic form as true copies unless the applicant expressly requests that certification. | |
| (5) Regulations may prescribe the mode of electronic lodgement or manner in which electronic records may be kept. | |
| Clause 91 | Any person processing personal data under this Act shall comply with the Data Protection Act. | The clause also strengthens public confidence in the administration of trusts given that trusts maintain sensitive information relating to settlors, beneficiaries, trustees and beneficial owners, the provision promotes lawful processing, confidentiality and protection of personal information. |
| | |
| | |
| Clause 92 | A person who— | This clause criminalises the submission of false or misleading information to the Registrar. The offence protects the integrity of the Register and promotes confidence in information relied upon by regulators, beneficiaries and third parties. |
| (a)lodges or causes to be lodged with the Registrar, a document containing information; or | |
| (b)makes a statement to the Registrar for any purpose that the person knows, or has reason to suspect, that is false or misleading in a material respect commits an offence and on conviction is liable to a fine not exceeding one million shillings or imprisonment for a term not exceeding two years, or to both. | |
| Clause 93 | A person who is convicted of an offence, under this Act, for which no penalty is specifically provided for, shall be liable to a fine not exceeding one million shillings. | This clause establishes a default penalty where no specific penalty is provided elsewhere in the Act. It ensures that breaches of statutory obligations remain enforceable and prevents regulatory gaps. |
| | |
| Clause 94 | (1) Any dispute in relation to a trust shall be determined in accordance with the dispute resolution mechanisms set out in the trust deed. | The provision respects party autonomy while preserving judicial oversight where no agreed dispute resolution mechanism exists. |
| (2) Where the trust deed does not prescribe a method of dispute resolution, the dispute shall be determined by the High Court. | |
| PART XV— PROVISIONS ON DELEGATED POWERS | |
| Clause 95 | (1) The Attorney General may make Regulations, not inconsistent with the provisions of this Act, containing provisions as may be necessary to give effect to the provisions of this Act. | This clause empowers the Attorney-General to make Regulations necessary for implementing the Act and identifies matters that may be prescribed through subsidiary legislation. The provision provides flexibility by allowing procedural and administrative matters to be updated without requiring amendment of the principal Act. |
| (2) Without prejudice to the generality of subsection (1), the Regulations made under this Act may prescribe— (a)manner and form of lodgment of any document required to lodged under this Act; | |
| (b)fees for services offered under this Act; | |
| (c)requirements to be met by corporate trustees; | |
| (d)disqualification of trustees; (e)manner and form of documents issued by the Registrar; | |
| (f) manner of access to information required to be shared under this Act; (g)procedure and requirements for electronic lodgments; | |
| (h)beneficial ownership information; (i)licensing of corporate trustees; and (j) any other information required to be prescribed by the Registrar under this Act. | |
| PART XVI— REPEAL, TRANSITIONAL AND SAVINGS PROVISIONS | |
| Clause 96 | Section 4 of the Registration of Documents Act is amended in subsection (1) by inserting the following paragraph immediately after paragraph (vii)— | This clause amends the Registration of Documents Act to recognise trust deeds and deeds appointing trustees under the new legislative framework. The amendment promotes consistency between the new Act and existing legislation governing registration of legal instruments. |
| (viii) a trust deed or deed of appointment of trustees registered Administration Act. | |
| Clause 97 | (1) Upon the coming into effect of this Act, the following Acts are repealed— (a)the Trustees (Perpetual Succession) Act; and | This clause repeals the Trustees Act and the Trustees (Perpetual Succession) Act while preserving existing trusts, rights and obligations. It deems existing trusts to continue under the new Act and provides a twenty-four (24) month transition period for compliance. The provision promotes continuity and avoids uncertainty by ensuring that existing trusts are not invalidated by the repeal of the previous legislation. |
| (b)the Trustees Act. | |
| (2) Despite the repeal of the laws in subsection (1)— | |
| (a)a trust, which has been duly incorporated under the Trustees (Perpetual Succession) Act (now repealed) and is in existence at the commencement of this Act or created as a result of registration of the deed under the Registration of Documents Act shall be deemed to be a Trust under this Act; | |
| (b)all existing trusts shall be required to comply with the requirements of this Act within twenty-four months of coming into effect of this Act or any such time as the Registrar may direct; (c)all rights, powers, liabilities and duties, whether arising under any written law or otherwise, which immediately before coming into operation of this Act were vested in, imposed on or enforceable by or against the existing trust, shall be transferred to, vested in, imposed on or be enforceable by or against the trust under this Act; | |
| (d)the settlor, trustee, beneficiary or enforcer of any existing trust shall on the date of the commencement of this Act be deemed to be the settlor, trustee, beneficiary or enforcer under this Act. | |
| (3) The Registrar may issue an existing trust with a new certificate of incorporation for trusts incorporated before the coming into effect of this Act and recall all certificates issues under the repealed Trustees (Perpetual Succession) Act. | |
