Testamentary Trusts: Setting Up a Trust Through Your Will in Kenya

Not every trust has to be set up during your lifetime. A testamentary trust is created by your will and takes effect only on your death: instead of leaving assets outright to your heirs, the will directs your executors to hold them, or pass them to trustees, on trust for your beneficiaries. It is a common choice for parents of young children and for families who want assets managed rather than handed over. This guide explains how a testamentary trust works in Kenya, including how it fits with the Trust Administration Act, 2026.

How a testamentary trust is created

A testamentary trust starts with a valid will. Under the Law of Succession Act, any person of sound mind who is not a minor may dispose of their free property by will (section 5), and a written will must be signed by the testator and attested by two or more competent witnesses (section 11). The will then sets out the trust: who the trustees are, which assets they hold, who benefits, and on what terms.

The Trust Administration Act recognises this route. A settlor may create a trust “by making a testamentary disposition” to it (section 12(1)), and a family trust may be “living or testamentary” (section 10(1)).

A testamentary trust does not avoid probate

This is the key difference from a lifetime trust. Because the assets are still yours when you die, they form part of your estate. No one may take possession of or deal with them without a grant of representation (section 45 of the Law of Succession Act), and on the grant they vest in your executors (section 79). The executors must collect the estate and pay funeral expenses, administration costs and debts (section 83) before the trust assets can be handed to the trustees.

A testamentary trust is also fully exposed to dependants’ claims. Section 26 of the Law of Succession Act allows a court to order reasonable provision for a dependant out of the net estate where a will does not make it. If avoiding probate is the aim, a lifetime trust is the better tool; our guide to choosing between a trust, a will and a company compares the options.

Does a testamentary trust need to be registered?

The Act points in two directions here, and it is worth being precise.

• Section 3(2) provides that nothing in the Act limits, invalidates or otherwise affects a trust arising under a will, or the court’s jurisdiction to recognise, enforce, vary or supervise it. A trust in a valid will therefore does not fail for want of registration.
• Section 5 requires written trusts to be registered or incorporated, and section 10 defines a family trust, including a testamentary one, as a trust that is registered or incorporated.

On our reading, the two fit together as follows. A trust created by will remains valid and enforceable under succession law and the court’s supervision, whether or not it is registered. Registering or incorporating it under the Act is what brings it within the Act’s family trust framework: a certificate, beneficial ownership filing, and, for an incorporated trust, legal personality. In practice registration can only happen after death, since the application must include a statement of the initial trust property (section 22), which the trustees hold only once the estate is administered. The Act does not fix a deadline for this, and the Attorney-General’s Regulations may address it. Until they do, trustees under a will should plan to register once the trust assets are transferred to them.

What to put in the will

• Trustees. Name at least one trustee and a replacement. Where trustees are individuals, at least one must be a Kenyan citizen or resident (section 11(3) of the Trust Administration Act). Executors and trustees can be the same people, but the roles are different.
• Beneficiaries. Identify them by name or by a clear class, such as “my children” (section 19).
• Minors. Set the age at which each child takes capital. The Act already allows trustees to pay income to a parent or guardian for a minor’s maintenance, education or benefit, and to accumulate the rest until the beneficiary turns 18 (section 50); the will can extend or restrict that.
• Powers. Give trustees clear investment powers. Under section 51(4), trustees may invest trust assets only where the deed authorises it.
• Assets. Say which assets go into the trust. Anything not specified passes under the rest of the will.

Tax points

The will itself, like a registered family trust instrument, is exempt from stamp duty (section 117 of the Stamp Duty Act). Under the Income Tax Act, gains on property transferred for the purpose of administering a deceased person’s estate are exempt where the transfer is completed within two years of death or such longer time as the Commissioner allows in writing, or within two years after any court case over the estate ends (First Schedule, paragraph 36(f)). Executors who delay can lose that relief.