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The Trust Administration Act, 2026 (Act) came into force on 8 September 2026. The Act marks the most significant overhaul of Kenya’s trust law framework in nearly a century. Importantly, the Act repeals the Trustee Act, Cap. 167 (modelled on the English Trustee Act of 1925) and the Trustees (Perpetual Succession) Act, Cap. 164. These two pieces of legislation formed the statutory backbone of Kenya’s legal regime on trusts.
14 September 26
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The use of trusts as part of family succession planning has grown significantly in Kenya and, as such, the new legal regime created under the Act will require careful consideration. The Act importantly introduces a framework to regulate trusts and creates reporting obligations. The Act additionally gives statutory backing to a purpose trust regime, which is a useful addition as it will allow for the creation of non-charitable trusts for purposes.
We highlight some of the salient provisions of the Act:
- A New Registrar of Trusts with Significant Powers
The Act establishes the office of Registrar of Trusts within the Business Registration Service. The Registrar is given significant administrative and regulatory powers, including powers relating to registration, statutory filings and trustee compliance. Of particular importance to trustees is the possibility of disqualification for specified defaults, such as failure to provide a register of beneficial owners. This represents a shift towards a more active regulatory model. Trustees should therefore expect trust administration to involve continuing statutory obligations. - Registration or Incorporation becomes Central
One of the most significant changes is the introduction of a mandatory registration or incorporation framework for a trust to be valid and enforceable. An unregistered trust deed may face restrictions on its use as evidence in transactions affecting trust property without the court’s leave, and failure to register may constitute a ground upon which the validity of a trust can be challenged.Existing trusts should not simply assume that their current trust deed is sufficient. Trustees should establish (i) whether the trust needs to be registered or incorporated; (ii) if unregistered or unincorporated, what documents and information concerning the trust and trustees will need to be submitted to the Registrar; (iii) whether the appointed trustees qualify to act under the Act; and (iv) whether any amendments to the trust deed or trustee arrangements are necessary in light of the provisions of the Act.
- Beneficial Ownership Transparency
The Act introduces a specific requirement for trusts to maintain and lodge a register of beneficial owners with the Registrar. Changes to the relevant information are required to be lodged within 21 days. For existing trusts, there is a 24-month transition period from commencement of the Act within which the beneficial ownership requirements are to be complied with. - Trustees will face Greater Accountability
The Act codifies and expands the statutory framework governing the powers and duties of trustees. Administrative defaults by trustees may attract prescribed penalties, while certain breaches constitute criminal offences carrying substantial fines and, in some cases, imprisonment. For example, improper disposal of trust property may attract, in the case of an individual trustee, a fine of up to KES 5 million and/or imprisonment for up to five years, or, in the case of a corporate trustee, a fine of up to KES 20 million. These are illustrative of the level of exposure introduced by the Act and will need to be read together with the final published legislation. - Introduction of “Trust Agents”
The Act introduces the concept of a “trust agent”. Trust agents may include advocates, certified secretaries and certified accountants appointed by trustees to assist with matters such as the formation, registration or incorporation of trusts, statutory filings, maintenance of required information and compliance with applicable laws and regulations. For trusts that have persons assisting with ongoing obligations, including statutory filings and maintenance of records, it is prudent to formalise such appointments and notify the Registrar of the appointment of a trust agent as required under the Act. Any subsequent termination of the trust agent must also be notified to the Registrar. - Trustee Numbers and Structure
The Act also introduces specific requirements concerning trustee composition for certain categories of trusts. In particular, charitable trusts and non-charitable purpose trusts must have at least 3 natural-person trustees or 1 corporate trustee. - Trustees to be Licensed
The Act introduces a regulatory framework for trustees and provides that corporate trustees will be subject to licensing requirements. The Attorney General is empowered to make regulations prescribing the requirements to be met by corporate trustees. - Non-Charitable Purpose Trusts
The Act gives statutory recognition to non-charitable purpose trusts, that is, a trust created to advance a specific, lawful purpose rather than for the benefit of identified beneficiaries. For such a trust to be valid, the stated purpose must be specific and capable of fulfilment, and the trust deed must make provision for the disposal of any surplus trust property upon termination. A non-charitable purpose trust can be a useful legal structure to hold assets that are not income-generating, where the purpose is to preserve the asset and use it for a specific purpose; to act as owner of an “orphan SPV” in financing arrangements; and for other arrangements where beneficiaries may not be required.
Conclusion
Considering the above, a “ health check” is now more important than ever. An early review of existing trust arrangements will help to identify any gaps, assess trustee arrangements, prepare for the new disclosure requirements and other required statutory compliance.
Considering the above, a “ health check” is now more important than ever. An early review of existing trust arrangements will help to identify any gaps, assess trustee arrangements, prepare for the new disclosure requirements and other required statutory compliance.
Should you have any questions regarding the information in this legal alert, please do not hesitate to contact Atiq Anjarwalla or Mona Doshi.
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Contributor:
Stephen Deche – Principal Associate