Trust vs Will: Why Kenyan families are rethinking how they pass on wealth

Your parents have a house, rental units, a few plots and perhaps shares in a family business.

The difficult question is what happens when they are no longer there to manage them.

Who controls the property, collects the rent and what happens to a minor child?

Can a family business survive several generations without being broken up?

Those questions explain part of the renewed interest in family trusts in Kenya.

Business Registration Service records show 601 trusts were registered in 2025/26, up from 388 the previous year.

The rise does not mean Kenyans are abandoning wills, but it does show that trusts are becoming more prominent in estate planning.

A will says what happens after death

A will is primarily a document for distributing a person's estate after death.

Kenya's Law of Succession Act gives an adult of sound mind the power to dispose of free property by will, subject to legal protections for dependants.

A person who feels they have not been reasonably provided for can ask the court to make an order for provision from the estate.

A will therefore remains an important part of succession planning, particularly for assets that remain in a person's name.

A family trust works differently

Kenyan law defines a family trust as a living or testamentary trust created to plan or manage a person's estate, preserve or create wealth for generations and operate as a non-trading entity.

The person creating the trust, known as the settlor, can also be a beneficiary.

Instead of simply saying who receives an asset after death, a trust establishes a structure in which trustees hold and manage property for beneficiaries under the terms of the trust.

That makes it useful where the family wants assets managed according to particular rules over time.

The big attraction is continuity

Consider a family that owns several rental properties.

Simply dividing them among four children may leave four owners with different interests and different ideas about whether to sell, develop or retain the properties.

A trust can instead keep those assets within one structure, with trustees managing them and distributing benefits according to the trust deed.

This is one reason wealth advisers have increasingly presented trusts as tools for preserving family businesses, property and investments across generations.

Trusts can be created during your lifetime

A common misconception is that a trust only becomes relevant after someone dies.

Kenyan law expressly recognises living family trusts, meaning they can be established during the settlor's lifetime.

Property can be added to a trust in accordance with its terms, allowing the structure to operate while the settlor is still alive.

That gives families an option that a conventional will does not:

Planning the management of wealth before death as well as after it.

Kenya's trust system has also changed

The 2021 amendments to the Trustees (Perpetual Succession) Act formally introduced the statutory family-trust framework.

Registered trustees can hold property through a corporate structure with perpetual succession.

In 2024, responsibility for incorporating and registering trusts was transferred to the Business Registration Service, which now handles the function previously performed through the Lands ministry.

BRS is also developing a national trust policy covering issues including trust formation, registration, trustees and trust property, showing that the regulatory framework is still evolving.

There can be tax advantages, but trusts are not “tax-free”

Kenya's tax law provides specific exemptions involving registered family trusts, including certain transfers of property into a registered family trust and capital gains relating to transfers of immovable property to one.

But that does not make every trust transaction tax-free.

The Finance Act 2026 also clarified the treatment of trust income, with income received by trustees treated as their income for tax purposes, while beneficiaries are not taxed again where the relevant tax has already been paid.

A trust cannot simply be used to defeat creditors

A trust is not a magic shield against every legal claim.

The Trustees (Perpetual Succession) Act states that a trust can be invalid where it involves illegality, fraud, misrepresentation, duress or other defects.

Courts can also declare a trust void where it was created for fraudulent purposes, including to evade creditors.

So, trust or will?

For many families, the answer is not one or the other.

A trust can be used to structure assets that need long-term management, while a will can deal with property outside the trust and other succession matters.

Kenyan estate-planning practitioners increasingly describe the two as complementary tools rather than direct substitutes.