The Limits of Wills
In a globalised world, I ask whether the real issue is who inherits or whether the estate structure will survive. Traditional wills, while familiar under the Law of Succession Act, are rigid, exposed to probate litigation, and limited across jurisdictions. Probate is public, and under Section 26 of the Law of Succession Act in Kenya, dependants may claim reasonable provision, often undermining testamentary intentions.
Legal Framework for Family Trusts in Kenya
Trusts separate legal ownership from beneficial entitlement, shielding assets from the settlor’s estate. The Section 3D of Trustees (Perpetual Succession) Act, Cap 164, allows for incorporation and validity of family trust, while the Perpetuities and Accumulations (Amendment) Act, 2022, permits perpetual existence across generations. A family trust, inter vivos or testamentary, may be charitable or non-charitable, benefit living or unborn, related or unrelated individuals, preserve wealth for generations, and remain valid even if the settlor is a beneficiary.
Cross-Border Succession and Asset Protection
Wills often require separate probate for foreign assets, causing delays and extra costs, whereas trusts bypass probate, allowing seamless administration of businesses, shares, and investments. Kenyan courts, including Albert Kigera Karume v Kung’u Gatabaki 2015 KEHC, recognise trust property as legally distinct and enforceable under fiduciary duties under Sections 6 & 15, Trustees Act, Cap 167. Under Section 4 of the Law of Succession Act Cap 160, Kenyan immovable property is governed by Kenyan law regardless of the owner’s diaspora status, while movable property generally follows the law of domicile.
For example, For Diaspora Kenyans living in jurisdictions such as Dubai, the UK, or the USA, it is crucial to distinguish between different categories of assets. Under Kenyan law, immovable property located in Kenya is governed exclusively by Kenyan succession law regardless of the owner’s domicile, while movable property may be governed by the law of the country in which the person was domiciled at death. This duality means that, for example, a Nairobi house follows Kenyan law, whereas foreign bank accounts or shares may follow UK or US law. International principles, such as the Hague Convention on the Law Applicable to Succession, support clearer conflict-of-laws rules and allow the deceased to select applicable law, though Kenya has yet to adopt it. The UK, for instance, recognizes foreign trusts under the Recognition of Trusts Act 1987, the UAE allows expatriates to register wills via the DIFC to avoid Sharia-based default rules, and the US honors properly executed wills and trusts under state law.
Given this complexity, Diaspora Kenyans should use a combination of wills, trusts, foundations, or family offices to harmonize cross-border succession, reduce multiple probate proceedings, and protect assets. Trusts provide a unifying structure that separates legal ownership from beneficial rights, ensuring continuity and minimizing disputes. By understanding Kenyan succession rules alongside applicable foreign laws, families can design comprehensive cross-border strategies that safeguard wealth, streamline administration, and respect the testator’s intentions across multiple jurisdictions.
Tax, Governance, and Confidentiality Advantages
The Finance Act 2021 amended Kenya’s tax laws to incentivise family trusts by exempting certain transfers into registered family trusts from stamp duty and capital gains tax. Specifically, it amended Section 52(2)(b) of the Stamp Duty Act Cap 480 to exempt conveyances or transfers of property including gifts inter vivos into a registered family trust from stamp duty, and introduced related exemptions in the Income Tax Act Cap 470 notably in Paragraph 36(g) and Paragraph 58 of the First Schedule to exempt capital gains arising on transfers of property including investment shares and immovable property to registered family trusts. These reforms effectively make transfers into family trusts tax‑neutral, supporting intergenerational planning, staged distributions, creditor protections, and governance mechanisms that enhance cross‑border estate planning for high‑net‑worth individuals.
Managing Risks
Trusts are not immune from challenge: poor drafting, improper asset transfer, sham arrangements, or enforcement issues in non-common law jurisdictions can expose them to invalidation. Trustees are bound by fiduciary duties and may be removed for breach. Yet, I find these risks manageable with professional administration, while wills inherently carry structural vulnerabilities such as probate delays, public exposure, forced provision claims, and jurisdictional fragmentation.
Conclusion
With our expertise as a law firm, we have helped families preserve wealth through carefully drafted trust documents and by following proper legal procedures for both Kenyans in Kenya and in the diaspora. And so, Family trusts provide flexibility, protection, and continuity that conventional wills alone cannot achieve. I warmly and highly recommend engaging legal expertise to navigate cross‑border and intergenerational wealth planning, ensuring your estate is protected, your intentions are honoured, and your legacy thrives smoothly across generations.
REFERENCES
LAWS, STATUTES AND KEY CASE LAWS
Stamp Duty Act, https://new.kenyalaw.org/akn/ke/act/1958/31/eng@2025-07-01#part_III__sec_52
The law of Succession Act, https://new.kenyalaw.org/akn/ke/act/1972/14/eng@2022-12-31
The Trustees (Perpetual Succession) Act, section 3D https://new.kenyalaw.org/akn/ke/act/1923/12/eng@2024-04-26
Income Tax, First schedule, para 58 and 36(d) https://new.kenyalaw.org/akn/ke/act/1973/16/eng@2024-12-27
Albert Kigera Karume & 2 others v Kung’u Gatabaki & 6 others [2015] KEHC 540 (KLR), https://new.kenyalaw.org/akn/ke/judgment/kehc/2015/540/eng@2015-12-03
NB: This article is intended for educational and informational purposes only and does not constitute legal advice. Readers are encouraged to consult a qualified legal professional for guidance specific to their individual circumstances, particularly regarding trusts, succession planning, and cross-border estate matters.