For a long time, trust law in Kenya has existed in pieces rather than as a complete system. Practitioners have had to rely on the Trustees Act (Cap 167) and the Trustees (Perpetual Succession) Act (Cap 164), laws that, while useful, were never designed to answer the full question of what a modern trust framework should look like. They dealt mainly with incorporation and basic administration, but left noticeable gaps in how trusts are created, supervised, and ultimately held accountable.
The Trust Administration Bill, 2026 steps into that gap with a very different ambition. Instead of patching over weaknesses, it rebuilds the structure entirely. It introduces a single, more coherent framework that follows a trust from the moment it is created, through its management, and even to its dissolution. In doing so, it directly responds to long-standing concerns around weak regulatory oversight, limited transparency, and the lack of meaningful enforcement mechanisms.
Creation and Validity of Trusts
One of the clearest changes appears right at the beginning: what counts as a valid trust. Under the previous framework, there was surprisingly little statutory guidance on this. The law focused more on the powers of trustees than on the nature of the trust itself. There was no clear definition, and very little direction on when a trust could be considered invalid. The new Bill takes a more deliberate approach. It defines what a trust is, explains how it must be created, and most importantly, sets a clear requirement that a written trust must be registered or incorporated to be valid and enforceable. Unwritten trusts are largely pushed to the margins, only admissible in limited circumstances and with court approval. It also becomes much clearer on invalidation. A trust can fail for reasons such as illegality, fraud, uncertainty, lack of capacity, or failure to register. This shift brings clarity and certainty to an area that was previously underdefined. It also aligns Kenya’s trust framework with international trust jurisdictions.
Types of Trusts Created
The Bill also brings structure to the types of trusts recognised in law: Charitable trusts, Non charitable trusts and Family trusts. Previously, charitable trusts existed, but not within a tightly defined statutory structure. Family trusts were widely used in practice but had no clear legal identity. Non-charitable purpose trusts sat in an even more uncertain space. Now, the Bill draws clear lines. It recognises them as distinct categories, each with its own logic and requirements. By formally distinguishing between the three , it aligns the legal framework with actual practice. It is a quiet but important shift, acknowledging how trusts are used in real life, rather than how the law once imagined them.
Registration and Incorporation
Under the old system, incorporation was the main route to legal personality, but the process itself lacked depth. There was little in the way of vetting, no real emphasis on beneficial ownership, and minimal connection to anti-money laundering concerns. At the same time, unincorporated trusts could operate entirely without registration, relying only on their trust deeds. The new Bill introduces a dual-track system: Registration (Part III) for incorporated trusts and Incorporation (Part IV) for trusts seeking legal personality.
Both processes now require disclosure of key parties, including beneficial owners, settlors, trustees, enforcers, and trust property. Importantly, the Registrar is granted authority to refuse registration on grounds such as national security risks, unlawful purpose, or adverse vetting findings. There is also an important clarification in that registration alone does not give a trust legal personality, that only comes with incorporation. It is a small distinction, but one that matters.
Trustees Qualifications, Duties and Accountability
Trustees themselves are also placed under a much sharper lens and the standard expected of them is significantly elevated. Previously, the law gave trustees broad powers but relatively limited guidance on accountability. Much of what governed their conduct came either from the trust deed or from general principles applied by the courts. The new Bill significantly strengthens this area by setting clear standards. Part IV (Sections 36–42) introduces clear qualifications and disqualifications, including factors such as criminal convictions, undischarged bankruptcy, mental incapacity, and corruption-related offences.
Further, Part VII (Sections 43–59) codifies a comprehensive duty of care that blends both subjective and objective standards. Trustees are now required to: Understand and adhere to the trust deed, act in good faith, avoid conflict of interest, treat beneficiaries fairly and maintain separation of trust property. These are not new ideas, but the Bill formalises them in a way that makes them enforceable. It also introduces administrative penalties for non-compliance, which signals a move away from relying solely on court action after things go wrong. In effect, trusteeship becomes less informal and more professional with clear standards and real consequences for failure.
The Enforcer- A new Institution
One of the most innovative features of the Bill is the introduction of the “enforcer.” This role provides an internal oversight mechanism within the trust structure itself. Appointed to monitor trustees and ensure compliance, the enforcer becomes particularly important in non-charitable purpose trusts where traditional beneficiary oversight may be absent. This reduces reliance on external enforcement and strengthens accountability from within.
Beneficial Ownership Transparency
The Bill also addresses long-standing concerns around opacity by introducing beneficial ownership transparency in Part IX. Trusts are now required to maintain and submit registers of beneficial owners, with strict timelines for updates and retention. Any changes must be reported within 21 days and records must be retained for at least seven years. Failure to comply may result in regulatory directives and, ultimately, disqualification of trustees. This aligns the framework with global standards on anti-money laundering and financial transparency.
Dissolution of Trusts
Equally substantive is the introduction of a more structured approach to dissolution under Part XIII of the Bill. Under the old regime, dissolution procedures for incorporated trusts were relatively basic, with minimal safeguards. There was no structured framework for dissolving unincorporated trusts. The Bill provides for publication of a gazette notice, a three-month window for public objections and oversight by the courts. It also allows for restoration where necessary and makes it clear that trustee liabilities do not simply disappear when a trust is dissolved. This ensures that accountability extends beyond the life of the trust.
POSITIVE DEVELOPMENTS
The Bill recognises the growing shift towards digital administration. Under Part XIV, it supports electronic processes and modern record-keeping, while emphasising the need to safeguard sensitive data. This reflects an effort to balance efficiency with confidentiality in an increasingly digital environment. This transition is grounded in a strong emphasis on data protection, requiring compliance with the Data Protection Act (Cap 411C) in the handling of personal information. This is particularly significant given the nature of the data involved trusts will now hold extensive and highly sensitive information, especially relating to beneficial ownership. It recognises the need for efficiency and modernisation, while also reinforcing the responsibility to safeguard confidentiality, ensure proper data handling, and maintain trust in the system itself.
GAPS AND RECOMMENDED SOLUTIONS
While the Trust Administration Bill, 2026 marks a significant step forward, a few gaps remain. For instance, while the Bill requires trustees to hold significant amounts of sensitive data, it does not clearly set out cybersecurity standards for protecting that information. In an increasingly digital environment, this omission creates a real vulnerability, not just for trustees, but for beneficiaries and the integrity of the trust itself. A more robust approach would be to introduce baseline cybersecurity obligations, or at the very least, expressly incorporate existing data protection and cybersecurity frameworks
Similarly, although the Bill adopts a broad definition of trust property that can accommodate intangible assets, it does not directly engage with the practical realities of digital assets. As cryptocurrencies, tokenised securities, and other digital holdings become more common, questions arise around how such assets are to be identified, valued, secured, and transferred within a trust structure. To address this, clearer guidance should be provided, either through express provisions or regulatory guidelines, on the management of digital assets. This could cover issues such as custody arrangements, valuation standards, and fiduciary responsibilities specific to digital holdings.
There is also some uncertainty around the use of electronic signatures. While the Bill contemplates digital processes, it does not explicitly confirm whether electronic signatures satisfy the requirements for executing a trust deed. Section 23[2] requires a trust deed to be executed and attested with signatures and witnesses’ details. In a system that is clearly moving online, that omission could create unnecessary friction. The bill should therefore have a provision or provide that electronic signatures satisfying the requisite standards are valid for trust deed execution, a gap that will cause practical difficulty as trust administration moves online.
CONCLUSION
Overall, the Trust Administration Bill, 2026 represents a clear move towards a more structured and accountable trust framework. It replaces an outdated system with one that better reflects modern practice, strengthens oversight, and enhances transparency. While there is room for refinement, particularly in relation to technology and digital assets, the Bill sets a strong and necessary foundation for the future of trust administration in Kenya.