Non-Charitable Purpose Trusts in Kenya: Uses Beyond Charity

Most people think of a trust as something set up for family members or a charity. Kenyan law also allows a third kind: a non-charitable purpose trust, which exists to achieve a specific purpose and can have no beneficiaries at all. Under the Trust Administration Act, 2026, purpose trusts sit alongside charitable and family trusts as a recognised category. They are little used in Kenya, but they solve problems that neither a family trust nor a company handles well.

What a non-charitable purpose trust is

Section 9 of the Act defines a non-charitable purpose trust as one established to fulfil a specific purpose that does not qualify as charitable, and expressly allows it to exist without any beneficiary. It is valid only if two conditions are met:

• the purpose is specific, capable of fulfilment and not illegal; and
• the trust terms provide for what happens to any surplus assets when the trust ends (section 9(3)).

This is a real departure from ordinary trust principles. Section 6(1)(b) allows a court to declare a trust invalid if it has no identifiable or ascertainable beneficiary, but it carves out non-charitable purpose trusts. The category itself is not new: it was first introduced in 2021 through amendments to the now-repealed Trustees (Perpetual Succession) Act, and the 2026 Act carries it forward.

Practical uses

• Holding the shares of a special purpose vehicle. In securitisation and project finance, the company that holds the assets is often meant to be independent of the business that originates them. A purpose trust can own that company’s shares for the purpose of supporting the transaction, without any party owning the vehicle outright. Our article on securitisation in Kenya covers why that separation matters.
• Keeping control of a family business. A purpose trust can hold a controlling block of shares for the purpose of maintaining the business as a going concern, separating control from the economic benefit that other family members receive.
• Maintaining a family property or burial ground. A trust whose purpose is the upkeep of an ancestral home, a family graveyard or a memorial has no natural beneficiary, which is exactly the situation section 9 addresses.
• Holding assets pending a future event. Assets can be held for a defined purpose until a milestone is reached, with the surplus distributed as the deed directs.

Why not simply use a company?

A company limited by guarantee can also hold assets without shareholders who profit from them, and it is familiar to banks and registries. The difference is in governance and purpose. A company’s directors owe duties to the company and can change its direction by resolution; a purpose trust’s trustees are bound to the stated purpose, and departing from it is a breach of trust for which they are personally liable for any resulting loss (section 61). For arrangements where the whole point is that nobody can redirect the assets, such as an independent holder of transaction shares or a long-term family control block, that rigidity is the advantage. Where flexibility matters more, a company may be the better fit.

Who enforces a trust with no beneficiaries?

In an ordinary trust, the beneficiaries hold the trustees to account. A purpose trust has none, so the enforcer becomes essential. Under section 14, a settlor, or a beneficiary in the absence of a settlor, may appoint one or more enforcers, and the Registrar must be notified within 21 days. The enforcer’s functions include enforcing the trust deed, inquiring into how the trust is being carried out, requiring trustees to remedy breaches and taking legal action against them (section 15), with access to any document or account needed for that work (section 16).

Because a purpose trust has no beneficiary who could make that appointment later, the deed should appoint the enforcer from the outset and set out how a replacement is chosen. A trustee cannot also act as enforcer (section 15(2)).

Trustees, registration and duration

A non-charitable purpose trust needs at least three individual trustees or one corporate trustee (section 11(1)), and where trustees are individuals, at least one must be a Kenyan citizen or resident (section 11(3)). Like any written trust, it must be registered or incorporated to be enforceable (section 5). Incorporation is usually the better route where the trust will hold shares or land, since an incorporated trust can own property in its own name (section 32).

Duration needs attention. The Perpetuities and Accumulations Act excludes family trusts from the perpetuity period (section 2(9)) but contains no equivalent exclusion for purpose trusts. Its rules apply to dispositions of immovable property (section 2(8)), and the instrument may specify a perpetuity period of up to 80 years (section 5(1)(a)). A purpose trust holding land should therefore state a fixed term within that limit. When the purpose is fulfilled, the trustees can apply to the Registrar for dissolution (section 84 of the Trust Administration Act).