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As we start the new year, we highlight some important legal developments in 2023 which impacts on estate and succession planning and emphasises the need for families to do their estate and succession planning effectively noting the changing legal landscape.
Treatment of “Illegitimate Children” under Islamic Law
Previously, Kenyan courts held that, under Islamic law, (which applies to persons of the Muslim faith) children born out of wedlock were not entitled to inherit from their father’s estate This position was based on Article 24(4) of the Constitution of Kenya, which allows certain qualifications to the Bill of Rights when applying Islamic law. In one of the decisions and in justifying the rationale for this position, the High Court noted that Islam does not recognise children born out of illicit relationships as legitimate heirs.
In a recent case, the Court of Appeal held that children born out of wedlock have the right to inherit from their father under Islamic law. The Court of Appeal based its decision on Article 27 of the Constitution of Kenya, which prohibits discrimination against any person on any grounds. The Court of Appeal also considered the fact that the child in question was treated as the deceased’s own during his lifetime, and therefore the child should inherit as a dependent of his father.
It remains to be seen if there will be an appeal to the Supreme Court of Kenya to finally determine the matter.
It is advisable that one considers effective succession planning by, for example, creating a lifetime trust that would cover all persons whom one may wish to provide for. A Sharia compliant trust could be set up to provide for an illegitimate child of a Muslim man, which would safeguard the child’s financial security. Assets transferred to a trust would not be subject to succession laws as the trust assets would be held and managed by a trustee and thus would not form part of the deceased’s estate.
Polygamous Intestate Estate
The Law of Succession Act provides that where a polygamous man dies without a will, his estate is to be equally distributed between his “houses”. “House” means each widow and their respective children.
In a recent case, which highlights the need to review the above statutory provision, evidence was produced to the High Court that the first widow and her well-to-do adult children had abandoned their elderly father and not provided for his medical expenses while ill. The Court noted that the father had carried out his constitutional duties towards the children of the first house, whereas they had failed in their constitutional duties towards their elderly father to provide him with reasonable care and assistance, as well as towards his elderly second widow. The Court noted the second house had minors and that, despite her age and health condition, the second widow had taken care of the deceased and had to sell assets to pay for his medical expenses without any contribution from the first house. The Court read the Law of Succession Act with the Constitution and endeavoured to make a fair division of assets between the houses considering, amongst other factors, the behaviour of each house towards the deceased in his elderly years.
To make it clear what each house is to inherit, it would be prudent for a polygamous man to make a will setting out his wishes. Since a will can be contested and litigation may take several years (preventing family members access to assets) until it is resolved, one can also consider creating a trust which would cater to the financial needs of family members, particularly elders and minors.
Matrimonial Property Rights
The Supreme Court issued a significant judgement holding that married couples are not automatically entitled to an equal share of assets upon divorce. The court emphasised that Article 45(3) of the Constitution of Kenya, which guarantees equal rights in the dissolution of a marriage, does not imply a mandatory redistribution of property rights.
The court stated that each spouse must demonstrate and evidence their contribution towards the acquisition of assets for the court to determine the appropriate percentage of distribution of assets upon divorce. The judges acknowledged the general understanding that spouses typically share everything and contribute to the family’s well-being, including financially, but clarified that specific evidence of contribution is required for property division.
It is important for a couple to consider entering into a pre-nuptial agreement before marriage to clearly establish property division and financial security in case of divorce, specifying which assets, including future assets, will or will not be subject to division and with proportions agreed in advance.
Every family’s circumstances are unique, and we at ALN Kenya provide tailor-made solutions so that you can plan your succession and transfer of wealth efficiently and effectively.
Should you have any questions regarding the information in this legal alert, please do not hesitate to contact Mona Doshi.