Why Rich Kenyans Are Choosing Trusts Over Wills to Protect Family Wealth

本站添加: 2026-05-16

[00:00:00]Welcome to Court Helicopters Explainer.

[00:00:03]Today, we are dealing on a Saturday the question about trusts.

[00:00:12]The question about the properties of somebody who has died.

[00:00:17]We dealt with the question of wills that most people want their properties to be dealt with after they have died. They write a will.

[00:00:26]We have also dealt with the question about people moving into what they call trusts.

[00:00:34]What are trusts?

[00:00:38]Why is everybody heading to register trust trusts?

[00:00:44]Who are trustees?

[00:00:46]And what are the benefits of a trust vis-a-vis a will?

[00:00:52]We go into the law. Remember, Court Helicopters is not about anything, it's about the law.

[00:01:00]The Trustees or Perpetual Succession Act Cap 164.

[00:01:06]We have it with us here.

[00:01:09]And here paragraph three, it talks about incorporation of a trustee.

[00:01:18]What Who can incorporate a trustee?

[00:01:22]Any person or body person who have lawfully constituted themselves for the purpose of forming a trust may apply to the registrar for a certificate of incorporation.

[00:01:33]And the registrar shall within 60 days of receipt of that application for incorporation of a trust grant or reject that application. So, you have only 60 days to apply and be confirmed or the registrar rejects.

[00:01:52]If he rejects, he will do what we do rejection by writing.

[00:02:00]If it is approved, then one will get a certificate of incorporation immediately.

[00:02:09]Then, once a trustee has been registered, it becomes a body corporate by the name described in that certificate and shall have perpetual succession and a common seal. When you talk of perpetual succession, it does not die because the owner has died.

[00:02:30]Governments have perpetual succession.

[00:02:34]Whatever credit, whatever debt Uhuru Kenyatta borrowed, Ruto must repay. That is what we call perpetual succession.

[00:02:45]It has power to sue and be sued. Wills, you cannot sue and you can't be sued.

[00:02:53]And you sue in their corporate name.

[00:02:56]And subject to the conditions and directions contained in the certificate, they can hold and acquire and buy any instruments under the common seal or convey, transfer, assign, charge, and demise and and any movable or immovable property. A trust can buy property.

[00:03:17]A trust can sell property. A trust can be sued in its own name. A trust is just like a a limited company.

[00:03:28]So, this is what it is. Paragraph three talks about irrevocable trusts.

[00:03:36]And it says, "Unless a trust contains an express power of revocation, it shall be deemed that it cannot be revoked."

[00:03:47]So, once a trust has been registered, it is permanent.

[00:03:52]It goes beyond generations to generations.

[00:03:55]Those who form the trust now, they try and die, the trust will be there forever, unless they put a clause that it is going to be revoked.

[00:04:10]What are the types of trusts that we have?

[00:04:14]Section 3B provides for what is called charitable trusts.

[00:04:19]What is a charitable trust?

[00:04:22]A charitable trust is a trust formed for the exclusive purpose of relief of poverty, the advancement of education, religion, or human rights and fundamental freedoms, or the protection of the environment, or any other purpose beneficial to the general public.

[00:04:44]Charitable trusts are for the general public.

[00:04:49]They are not for family.

[00:04:52]So, these are people want to develop things to help community, either in education, either in politics.

[00:05:00]>> [clears throat] >> You've seen Kalonzo Musyoka Foundation.

[00:05:03]You've seen Wamalwa Foundation. You've seen People's Foundation. All those things are for the public good.

[00:05:11]They are not for family good.

[00:05:15]It goes on to say, >> [snorts] >> "They are for That is the first trust, charitable trusts."

[00:05:24]Three, C, non-charitable trusts.

[00:05:28]"A non-charitable trust may be created for a specific purpose, notwithstanding the absence of any beneficiary.

[00:05:37]A non-charitable purpose trust becomes valid if the purpose, whether partly charitable or not, for which the trust is created is specific, capable of fulfillment, and it is not illegal.

[00:05:50]Therefore, people form non-charitable trusts, but with the specific purposes.

[00:05:59]That one falls under. Today, we are more interested in what is called family trusts.

[00:06:08]A family trust is a trust created under 3D.

[00:06:15]What does it say? 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 purpose of planning or managing the personal estate or the personal or of his life. What is a testamentary trust?

[00:06:48]These are trusts that have been ordered by a will.

[00:06:54]Somebody in his will says, "My properties will be registered in a trust after I die."

[00:07:04]What are living trusts? Living trusts are established and become operational during the lifetime of the person setting up the trust, called a settler.

[00:07:16]Omari can form a living trust when he's alive, before he dies.

[00:07:25]That is what you call a living trust.

[00:07:28]Most people are moving into forming living trusts because they are saying a living trust can be revoked or not revoked.

[00:07:42]And >> [snorts] >> these terms can be changed because the owner is alive. So, the [snorts] question that we are asking, and that is why today we are dealing with trust. Why will people instead of going for wills, what are the benefits of establishing a private or a family trust?

[00:08:09]There are very many reasons as to why one will want to have that. Number one is the privacy.

[00:08:19]Unlike wills, the the property is hidden.

[00:08:25]Nobody can know what properties are there, what arrangements are there.

[00:08:31]Number two, it [snorts] protects members of the vulnerable group.

[00:08:38]Those ones who are vulnerable are protected by the trust. Three, the person who is the owner, who is the father, is able to give instructions on how his protection of the vulnerable members of the those who are disabled will be dealt with.

[00:09:01]Lastly, the wishes of the old the person who is forming the trust is protected.

[00:09:08]That person is called a settler.

[00:09:11]We also know very well that once a trust has been has been set up about the taxes, for example, stamp duty taxes, most of the properties in a in a in a in a in a trust are not taxable. Therefore, these trusts can also be used for trading purposes.

[00:09:38]You can give instructions the trust that all the properties in that trust cannot be sold.

[00:09:45]Then your children, if you know your children are bad, they can sell the properties, all those properties will be registered by in a trust. Then the children get dividends. Most of our children nowadays are not net producers of income, but they are net eaters of income. So the only way to get your property to see the generation of your grandchildren is to register those properties in a trust.

[00:10:19]Because you can say this trust will live and all the properties in it will live for 500 years.

[00:10:26]So any generation in who comes gets dividend.

[00:10:31]You can invest this trust property in banks, you can invest it in bigger trust management companies, and you can trade and make profit.

[00:10:45]That is the law nowadays. Most people are running away from wills. Most people are running away because they fear their children, their their blood their sons and daughters who will come back might lose or sell the property, especially when they marry.

[00:11:07]Can they marry a woman who will want to destroy that property? Can [clears throat] your daughter marry a man who is a woman eater, who wants to eat her money?

[00:11:18]The answer from Wakili Danisa Nomari is the only way to protect your property is through a trust, not through any other ways. In the trust, the management is easier and protection of the property is available. Wakili Danson Mwale looking at that law on Saturday.