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What should be included in a Deed of Trust?

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Introduction

A Deed of Trust is a legal document that establishes a trust and outlines the terms and conditions under which the trust operates. In Kenya, the creation and administration of trusts are governed by various laws, including the Trustees (Perpetual Succession) Act, the Trustee Act, and the Law of Contract Act. This document is crucial for ensuring that the trust operates in accordance with the wishes of the settlor (the person creating the trust) and complies with Kenyan law.

Legal Framework
- Trustees (Perpetual Succession) Act
- Trustee Act
- Law of Contract Act
Key Elements of a Deed of Trust
- Identification of Parties
- Declaration of Trust
- Trust Property
- Beneficiaries
- Trustee Powers and Duties
- Duration of the Trust
- Governing Law
- Amendments and Revocation
- Signatures and Execution
Conclusion

1. Legal Framework

Trustees (Perpetual Succession) Act

Section 3: Provides for the incorporation of trustees of certain bodies.
Section 4: Outlines the application process for a certificate of incorporation for trustees.

Trustee Act

Section 2: Defines key terms such as "trustee" and "trust property."
Section 20: Details the general powers of trustees.
Section 21: Specifies the duties of trustees.

Law of Contract Act

Section 3: Stipulates that certain contracts must be in writing and signed by the parties to be enforceable.

2. Key Elements of a Deed of Trust

Identification of Parties

Settlor: The person who creates the trust.
Trustee(s): The individual(s) or entity responsible for managing the trust.
Beneficiaries: The individuals or entities who will benefit from the trust.

Declaration of Trust

A clear statement by the settlor declaring the intention to create a trust.
The declaration should specify the purpose of the trust and the settlor's intentions regarding the trust property.

Trust Property

A detailed description of the assets being transferred into the trust.
This can include real estate, cash, stocks, bonds, or other valuable items.
The property must be clearly identified to avoid any ambiguity.

Beneficiaries

A list of all beneficiaries who will benefit from the trust.
The Deed of Trust should specify the nature and extent of each beneficiary's interest in the trust property.
Conditions under which beneficiaries will receive their benefits should also be outlined.

Trustee Powers and Duties

Powers: The Deed of Trust should outline the powers granted to the trustees, such as the power to invest trust property, sell assets, or distribute income.
Duties: The duties of the trustees should be clearly defined, including the duty to act in the best interests of the beneficiaries, the duty to keep accurate records, and the duty to provide regular reports to the beneficiaries.

Duration of the Trust

The Deed of Trust should specify the duration of the trust.
This can be for a fixed period, until a specific event occurs, or for the lifetime of the beneficiaries.

Governing Law

The Deed of Trust should specify that it is governed by the laws of Kenya.
This ensures that any disputes or issues arising from the trust will be resolved in accordance with Kenyan law.

Amendments and Revocation

The Deed of Trust should outline the conditions under which it can be amended or revoked.
This may include the consent of the settlor, trustees, and beneficiaries, or a specific procedure for making changes.

Signatures and Execution

The Deed of Trust must be signed by the settlor and the trustees.
The signatures should be witnessed by independent parties to ensure the document's validity.
The document should be executed in accordance with the requirements of the Law of Contract Act.

Conclusion

A Deed of Trust is a vital legal document that ensures the proper management and distribution of trust property in accordance with the settlor's wishes and Kenyan law. By including the key elements outlined above, the Deed of Trust will provide a clear and enforceable framework for the operation of the trust. It is advisable to consult with a legal professional when drafting a Deed of Trust to ensure compliance with all relevant laws and regulations.