Kenya’s trust law has entered a new phase.
For decades, the legal framework governing trusts was spread across different statutes and principles of equity, with the Trustees Act and the Trustees (Perpetual Succession) Act providing much of the statutory foundation. While this framework enabled the establishment and administration of trusts, it did not provide the kind of comprehensive statutory architecture that modern trust administration increasingly requires. That position has now changed with the enactment of the Trust Administration Act, 2026.
The Act was assented to on 8 September 2026 and is set to commence on 25 September 2026. Its stated purpose is to consolidate the law relating to the registration, incorporation, management and regulation of trusts and trustees. In doing so, it introduces a considerably more structured framework governing the entire life cycle of a trust, from its creation and registration to the administration of trust property, regulation of trustees, disclosure of beneficial ownership, compliance and eventual dissolution.
The significance of the legislation, however, goes beyond the repeal and replacement of previous statutes. It represents a broader shift in how trusts are to be understood and administered in Kenya. The trust is increasingly being treated not merely as a private legal arrangement between a settlor, trustees and beneficiaries, but as a structured fiduciary arrangement subject to statutory governance, transparency and accountability requirements.
A more comprehensive statutory framework
The Act applies to trusts registered or incorporated under the new framework, trusts created by court order and trusts created under other written laws. At the same time, it preserves the ability of courts to recognise and enforce trusts and fiduciary obligations arising under customary law, equity, wills, court orders and other written law. This is significant because the legislation does not attempt to displace the broader equitable foundations of trust law. Instead, it provides a statutory framework within which those principles can operate.
The Act also introduces statutory definitions for many of the principal actors and concepts associated with trusts, including the settlor, trustee, beneficiary, beneficial owner, trust agent, enforcer and trust property. This provides greater certainty in an area of law where the meaning and consequences of particular relationships have historically depended heavily on the terms of the trust instrument and general principles of equity.
Creation and enforceability of trusts
The Act provides that a trust is created where identifiable property or an interest in property is transferred to, vested in or placed under the control of a trustee, or where the owner declares that the property is held in trust. The property must be held for one or more beneficiaries, a class of beneficiaries or for the furtherance of a specified lawful purpose, with the trustee appointed to administer, control or dispose of the property in accordance with the trust deed, the law or an order of the court.
The Act recognises both written and implied trusts. However, written trusts are now subject to a particularly important statutory requirement. A written trust is required to be registered or incorporated under the Act and, as a general rule, will not be enforceable unless this has been done. This represents an important practical consideration for practitioners. Registration is no longer merely a procedural step undertaken after a trust has been drafted. For written trusts, it forms part of the statutory framework governing enforceability. A person claiming an interest under an unregistered or unincorporated written trust may nevertheless approach the court for recognition or enforcement, but the statutory position makes clear that proper registration or incorporation should form part of the establishment process from the outset.
The integrity of the trust structure
The Act also identifies circumstances in which a trust may be declared invalid. These include situations where the trust is established for an unlawful purpose, has no identifiable or ascertainable beneficiary where one is required, is created through duress, fraud or misrepresentation, is established in breach of fiduciary duty, contains terms so uncertain that performance is impossible, or is established by a settlor without the requisite legal capacity. Of particular importance is the provision dealing with fraudulent trusts. The court may declare a trust void where it is established for fraudulent purposes, including for the purpose of evading creditors.
This reinforces an important principle in trust planning: the effectiveness of a trust depends not only on the form of the documentation but also on the circumstances surrounding its creation and the transfer of assets into it. A trust should not be regarded as a mechanism through which existing liabilities or legitimate claims can simply be defeated. The timing, purpose and circumstances of asset transfers will remain legally significant.
Irrevocability as the statutory position
The Act introduces another important drafting consideration by providing that a trust is deemed to be irrevocable unless the trust deed expressly contains a power of revocation. This means that revocability should be approached as a deliberate structural decision when
preparing a trust deed. Where a settlor intends to retain a power to revoke, that power should be expressly provided for in the instrument.
The distinction between revocable and irrevocable trusts may have significant consequences for the governance of the trust, the powers retained by the settlor and the manner in which the trust may subsequently be amended or terminated. The drafting of the revocation and amendment provisions therefore warrants considerably more attention than treating them as standard boilerplate clauses.
Family trusts and intergenerational wealth
One of the most significant aspects of the new legislation is the express statutory recognition of family trusts. The Act defines a family trust as a living or testamentary trust established for the purpose of planning or managing personal estates. A family trust is required to be made in contemplation of beneficiaries, established for the preservation or creation of wealth for generations and constituted as a non-trading entity.
The legislation also expressly provides that a settlor may be a beneficiary of the family trust. This is important because it allows the settlor to participate within the beneficial structure without making the trust invalid merely because the settlor is also a beneficiary. The limitation is that the settlor cannot be the sole beneficiary of a trust that they have established.
The statutory recognition of family trusts provides an important foundation for succession and intergenerational wealth planning in Kenya. A family trust can be structured not simply as a vehicle for transferring assets upon death, but as a governance mechanism through which family wealth can be held, managed and distributed over time.
That makes the drafting of the trust deed particularly important. Questions concerning who exercises control, who benefits, when distributions can be made, how trustees are replaced, how disputes are resolved and what happens when beneficiaries change should ideally be resolved within the governance architecture of the trust rather than left to future family disagreements.
The settlor and reserved powers
The Act adopts an interesting approach to the relationship between the settlor and the trustees. Subject to the trust deed and applicable law, the settlor may reserve significant powers, including the power to revoke, vary or amend the trust, approve distributions, give directions concerning trust property, appoint or remove trustees, enforcers or beneficiaries, appoint or remove a trust agent and restrict the exercise of certain trustee powers. At the same time, the Act expressly provides that the reservation of such powers does not, by itself, confer on the settlor the status of trustee.
This distinction creates considerable scope for sophisticated trust structuring. A settlor may retain defined strategic powers while the day-to-day administration and fiduciary obligations remain with the trustees. The drafting challenge will therefore be to achieve an appropriate balance between retained settlor influence and genuine trustee responsibility. Poorly drafted reserved powers may create uncertainty about where effective control of the trust actually lies, whereas carefully defined powers can provide an effective governance mechanism within the statutory framework.
The introduction of the enforcer
The introduction of the statutory concept of an enforcer is one of the more notable innovations under the Act. An enforcer may be appointed by the settlor or, in the absence of a settlor, by a beneficiary, subject to the terms of the trust deed. The role is essentially one of oversight. An enforcer may enforce the terms of the trust deed, inquire into its implementation, require trustees to take remedial action where there has been a breach, report financial or other breaches to the settlor or beneficiaries and pursue civil or criminal proceedings against trustees where appropriate.
The role is subject to important safeguards. A person performing the relevant functions as an enforcer cannot simultaneously perform those functions as a trustee, and the enforcer is prohibited from profiting from the appointment. For larger family trusts, purpose trusts and more complex structures, this additional layer of oversight could become an important governance feature. It creates a mechanism through which the performance of trustees can be scrutinised without necessarily requiring beneficiaries to immediately resort to litigation.
Registration and incorporation
The Act makes an important distinction between a registered trust and an incorporated trust. Registration does not give a trust separate legal personality. Upon registration, the Registrar issues a certificate confirming that the trust has been registered as an unincorporated trust.
Incorporation, on the other hand, produces a body corporate with perpetual succession and the capacity to sue and be sued, acquire and hold property in its own name and undertake other lawful acts. Not every trust necessarily requires incorporation. The choice should instead be informed by the nature and value of the trust assets, the transactions the trust is expected to undertake, its governance requirements and the objectives of the settlor.
For some structures, a registered unincorporated trust may be appropriate. For others, particularly those requiring the trust itself to hold property, enter into contracts or undertake transactions as a separate legal entity, incorporation may provide a more suitable structure.
A new emphasis on beneficial ownership
The Act introduces a formal beneficial ownership regime for trusts. An application for registration must include a register of beneficial owners, together with details concerning the beneficial owners of the trust. Similar requirements apply to applications for incorporation.
The trustees are further required to maintain records concerning beneficial ownership and to update the relevant information as required under the Act. This is part of a broader movement towards greater transparency around ownership and control structures.
For practitioners, beneficial ownership should therefore be considered at the initial structuring stage. It is not simply a compliance form to be completed when filing an application. Advisers will need to properly identify the persons falling within the statutory concept of beneficial ownership and ensure that the trust’s internal records remain consistent with information submitted to the Registrar.
Trusteeship becomes a more clearly regulated fiduciary role
The Act places significant statutory obligations on trustees. A trustee is required to exercise reasonable care, skill and diligence, taking into account the knowledge, skill and experience reasonably expected of a person performing the relevant functions. The trustee must know and comply with the terms of the trust deed, act honestly and in good faith, act in the interests of the beneficiaries or permitted purpose of the trust, avoid conflicts of interest and, where appropriate, treat beneficiaries impartially.
The Act also imposes a duty on trustees to preserve trust property. A trustee cannot dispose of trust property in a manner that frustrates or adversely affects the purpose of the trust or the interests of beneficiaries. The consequences of breaching this obligation are significant, with the Act providing for substantial criminal penalties in certain circumstances. The practical consequence is that trustees will need to approach their role with greater formality and discipline. Trustee meetings, resolutions, investment decisions, distributions and transactions involving trust property should be properly documented.
Separation of trust property
The requirement that trust property be kept separate from the trustee’s personal property is equally important. The Act requires trust property to remain separately identifiable and requires trust accounts and investments held with financial institutions to be identifiable as trust accounts or investments. Trustees must also maintain adequate, accurate and up-to-date records concerning the trust and its administration.
This reinforces a fundamental principle of trusteeship: the trustee does not own trust property beneficially for personal purposes. For practical purposes, trustees should therefore
maintain appropriate banking arrangements, asset registers, accounting records, resolutions and supporting documentation. The administration of a trust should produce a clear documentary trail capable of demonstrating how trust property has been received, managed, invested and distributed.
The trust deed as the central governance document
The Act makes the trust deed the central instrument through which much of the trust’s governance is established. Section 23 requires the deed to address matters including the creation and management of the trust, appointment and removal of trustees, the trustees’ acceptance of office, the type and purpose of the trust, trust property, the initial trustees, any enforcer, security requirements and the beneficiaries or class of beneficiaries. The deed must also be executed by the settlor or representative and the trustees, with the signatures properly attested.
The statutory requirements, however, should be viewed as the minimum framework rather than the complete architecture of a sophisticated trust. A properly considered trust deed should anticipate the practical life of the trust. It should provide clarity on trustee decision-making, reserved powers, distributions, conflicts of interest, trustee succession, amendment, removal, beneficiary rights, deadlock, dispute resolution, investment powers and termination.
Record keeping, compliance and professional administration
The Act significantly expands the information trustees are expected to maintain. Trust records must include information concerning settlors, trustees, enforcers, beneficiaries and beneficial owners, together with the trust deed, certificates of registration or incorporation, amendments, trust property, liabilities, income, expenses, transactions, investments and relevant relationships with financial and reporting institutions.
The Act also contemplates record keeping in relation to foreign trusts administered by trustees where those trusts have relevant Kenyan connections.This makes trust administration a multidisciplinary exercise. Legal compliance will increasingly intersect with accounting, tax, corporate governance, data protection and anti-money laundering considerations. Trustees and professional advisers will therefore need to move away from viewing trust administration as a one-off incorporation exercise and towards treating it as an ongoing governance responsibility.
Data protection and trust information
The increased transparency requirements also raise important data protection considerations. Trust administration necessarily involves personal information relating to settlors, trustees, beneficiaries, beneficial owners and other persons connected with the trust. The Act expressly
requires compliance with the Data Protection Act. This means that trust administrators will need to consider not only what information must be maintained and disclosed, but also how that information is collected, stored, accessed and protected. The move towards electronic filing and electronic maintenance of records makes these considerations even more relevant.
Existing trusts and the transition to the new regime
The commencement of the new Act does not mean that existing trusts simply disappear. The legislation repeals the Trustees (Perpetual Succession) Act and the Trustees Act but contains transitional and saving provisions for trusts that were already duly incorporated or established under the previous framework. Such trusts are brought within the new statutory regime. The practical question for existing trustees is therefore not whether the trust remains valid, but whether its existing structure, documentation and governance arrangements are aligned with the new statutory framework. Existing trusts should accordingly be reviewed against the Act, particularly in relation to trustee particulars, beneficial ownership information, trust property, governance provisions, record keeping and registration status.
What does this mean for clients?
For individuals considering establishing a trust, the new framework creates both greater certainty and greater responsibility. A trust should now be approached as a carefully designed legal and governance structure rather than simply a document for transferring assets. The settlor’s objectives, the nature of the assets, the intended beneficiaries, the degree of control to be retained, the powers of the trustees, the possibility of appointing an enforcer and the intended duration of the structure should all be considered before the trust deed is finalised.
For families undertaking succession planning, this may be particularly significant. The statutory recognition of family trusts provides a clear framework for establishing structures capable of holding and preserving wealth across generations.
For trustees, the Act brings greater accountability. Trustees will need to understand not only the terms of the trust deed but also their continuing statutory obligations.
For advocates and other professional advisers, the legislation creates an opportunity to move towards a more sophisticated trust advisory practice in which drafting, governance, compliance, asset structuring and ongoing administration are considered as parts of the same exercise.
Looking ahead
The Act is comprehensive, but its implementation will be equally important. Several aspects of the new framework are expressly left to regulations, including requirements applicable to corporate trustees, beneficial ownership information, electronic filing, fees, licensing and other administrative matters. The practical operation of these provisions will therefore become clearer as the regulatory framework is developed and the Registrar begins administering the new regime.
There will also inevitably be questions arising from the interaction between the new statutory framework and other areas of Kenyan law, including succession, taxation, land, company law, insolvency, anti-money laundering and data protection. The development of trust law will therefore not end with the enactment of the Trust Administration Act. The Act provides the architecture. Practice, regulation and judicial interpretation will determine how that architecture operates in particular circumstances.
Conclusion
The Trust Administration Act, 2026 represents a significant development in Kenya’s legal framework for trusts. It brings together the creation, registration, incorporation, administration and dissolution of trusts within a single statutory framework and introduces clearer rules concerning trustees, beneficiaries, settlors, enforcers, beneficial ownership and trust property. More importantly, it changes the conversation around trusts.
The question is no longer simply whether a person should establish a trust. The more important question is whether the trust has been properly structured, whether its governance mechanisms are sufficiently robust, whether its assets have been properly settled, whether its trustees can effectively administer it and whether the structure can withstand the passage of time and changes in the people involved.
For family wealth and succession planning in particular, the new framework presents an opportunity to build structures that are not merely legally valid at inception, but capable of functioning effectively across generations. The real test of the new regime will therefore be in its administration. A well-drafted trust deed may establish the framework, but it is disciplined governance, proper record keeping, transparent administration and faithful adherence to the settlor’s intentions that will ultimately determine whether the trust achieves its purpose.
Kenya’s trust regime has entered a new era. The next phase will be about moving from simply creating trusts to properly governing them.
