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Law of trusts in Kenya summarized

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Introduction

The law of trusts in Kenya is a critical aspect of the legal framework that governs the creation, operation, and termination of trusts. Trusts are arrangements where one party, known as the trustee, holds property for the benefit of another party, known as the beneficiary. The law of trusts in Kenya is primarily derived from the Trustee Act (Cap 167, Laws of Kenya), the Indian Trusts Act of 1882 (as applicable in Kenya), and various principles of common law and equity that have been adopted into Kenyan law. This summary aims to provide an overview of the key elements of the law of trusts in Kenya, including the creation of trusts, the duties and powers of trustees, and the rights of beneficiaries.

Creation of Trusts
Types of Trusts
Duties of Trustees
Powers of Trustees
Rights of Beneficiaries
Termination of Trusts
Conclusion

1. Creation of Trusts

Legal Requirements: For a trust to be valid in Kenya, it must have a clear intention to create a trust, a defined trust property, identifiable beneficiaries, and a trustee willing to accept the trust. The trust must be created for a lawful purpose.
Express Trusts: These are trusts explicitly created by the parties, usually in writing. They are governed by the provisions of the Trustee Act and the Indian Trusts Act of 1882.
Implied Trusts: These arise by operation of law and include resulting and constructive trusts. They are not created by an express intention but are implied by the law to give effect to the presumed intentions of the parties or to prevent unjust enrichment.

2. Types of Trusts

Charitable Trusts: These are created for purposes considered beneficial to the public. The Trustee Act provides for the creation and operation of charitable trusts.
Private Trusts: Created for the benefit of specific individuals or families.
Purpose Trusts: These are rare and are created for a specific purpose rather than to benefit identifiable individuals. They are generally not enforceable unless they are charitable.

3. Duties of Trustees

Duty of Care: Trustees must act with the care and skill that a reasonably prudent person would exercise in similar circumstances.
Duty to Act in Good Faith: Trustees must act honestly and in good faith for the benefit of the beneficiaries.
Duty to Follow the Terms of the Trust: Trustees are bound to act according to the terms of the trust document.
Duty to Account: Trustees must keep accurate records and provide accounts to the beneficiaries.

4. Powers of Trustees

Administrative Powers: These include the power to invest trust property, sell or lease property, and carry out the terms of the trust.
Discretionary Powers: Trustees may have powers granted by the trust document or the law to make certain decisions based on their discretion.

5. Rights of Beneficiaries

Right to Information: Beneficiaries have the right to be informed about the trust and to inspect the trust documents.
Right to Accounting: Beneficiaries can request accounts and financial statements related to the trust.
Right to Enforce the Trust: Beneficiaries can take legal action to enforce the terms of the trust and the duties of the trustees.

6. Termination of Trusts

By Terms of the Trust: A trust may be terminated according to the provisions in the trust document.
By Agreement: All beneficiaries may agree to terminate the trust if they are all competent to do so.
By Fulfillment of Purpose: Once the purpose of the trust has been fulfilled, the trust may be terminated.
By Operation of Law: Certain circumstances, such as the impossibility of achieving the trust's purpose, may lead to termination by operation of law.

7. Conclusion

The law of trusts in Kenya is a complex area that encompasses various types of trusts, each with its own set of rules regarding creation, administration, and termination. Trustees have significant duties and powers in managing trust property, while beneficiaries have rights that must be respected and upheld. Understanding the nuances of the law of trusts is essential for anyone involved in the creation, administration, or benefit of a trust in Kenya.