Why Lifetime Estate Management Matters in Kenya?
In Kenya, countless families find themselves locked in endless succession disputes after a loved one’s death, cases that drag on for years, draining emotional and financial resources. Yet, most of these conflicts could be avoided with proper estate planning during one’s lifetime.
Estate management is the legal and administrative process of organizing, administering, and distributing one’s assets, movable (e.g., bank accounts, vehicles, shares) and immovable (e.g., land, houses), during one’s lifetime and planning their transfer upon death. Proper estate management ensures your legacy is protected, beneficiaries are clear, and costly disputes are avoided.
The key to safeguarding one’s heritage and ensuring a smooth, dispute-free transfer of wealth lies in proactive, comprehensive estate management throughout one’s lifetime.
What Are the Main Legal Avenues for Managing an Estate in Kenya?
The Law of Succession Act (Cap 160) provides the primary legal framework for inheritance in Kenya. However, several complementary tools, such as joint ownership, lifetime gifting, wills, family trusts, and company structures, can help one manage their estate proactively and avoid costly litigation.
What is joint ownership, and how does it protect my estate?
Joint ownership (or joint tenancy) is a form of co-ownership where two or more people own property together with equal rights. When one owner dies, their interest automatically passes to the surviving owner(s) by operation of law; this is called the right of survivorship (jus accrescendi).
Upon the death of one joint owner, the survivor presents the death certificate to the Land Registrar, who removes the deceased’s name and transfers the title to the survivor.
It is governed by the Land Registration Act, 2012 (Section 91(2)), which recognizes joint tenancy and tenancy in common. In joint tenancy, the right of survivorship applies.
Merits:
- Automatic transfer upon death (no probate needed).
- Minimizes disputes among heirs.
Demerits:
- Must be clearly registered as joint tenancy.
- There is the risk of a joint tenant severing the joint tenancy or selling it.
- Can complicate future sale or transfer if co-owners disagree.
- The surviving co-owner gets absolute ownership—potentially excluding other heirs.
- Difficult to revoke or modify later.
What is a gift inter vivos, and how is it used in estate planning?
A gift inter vivos is a lifetime, voluntary, and unconditional transfer of property from donor to donee for the immediate benefit and enjoyment of the recipient.
It is governed by the General principles of Common Law and Contract Law, and for land, the Land Registration Act, 2012. The Law of Succession Act (Cap 160) Section 42 allows the court to consider lifetime gifts (hotchpot) when distributing an intestate estate.
Requirements:
- The donor must have a clear intention to make an immediate, irrevocable gift, and the gift must be complete.
- Complete transfer to the recipient, e.g, execution of deed transfer in land and transferring the title to the donee. For other assets, there needs to be legal delivery, e.g., the transfer of share certificates, a physical handover, or the execution of a deed of gift. Instrument in writing, or declaration of trust.
- The donor must have the requisite legal capacity (sound mind and of age) to transfer the property.
- The donee must accept the gift, though acceptance is generally presumed unless expressly rejected.
Merits:
- Immediate and irrevocable transfer, beneficiary takes possession during the donor’s lifetime.
- Avoids post-death disputes since ownership is already transferred.
- May reduce the size of the estate, simplifying future administration.
Demerits:
- Irrevocable, once given, the donor cannot reclaim the property.
- May cause resentment among other heirs if not communicated transparently.
- Must comply with transfer formalities (e.g., registration under the LRA).
- Excessive gifting can leave the donor financially exposed in old age.
What is donatio mortis causa? When is it applicable, and how is it different from a gift inter vivos?
A donatio mortis causa (DMC) is a gift made when someone anticipates imminent death, with the intention that it only takes effect upon their death.
DMC is governed by Section 31 of the Law of Succession Act (CAP 160)
Requirements:
- Gift must be made in contemplation of death (i.e., a present illness or danger, not just the general inevitability of death).
- Must be actual or constructive delivery of the subject matter to the intended recipient.
- Gift is conditional on the death of the donor and is revoked if the donor recovers or the donee dies first.
- The subject matter must be property capable of being bequeathed by will.
- Cannot be valid if death is by suicide.
Merits:
- Flexible for last-minute estate planning.
- Avoids probate for the gifted asset.
- Automatically revoked if the donor recovers.
Demerits:
- Can be challenged if death is not imminent.
- Narrow applicability, only valid if the donor dies from that specific cause.
- Not suitable for immovable property (land) without registration.
- Requires clear evidence of intent and delivery.
- Relies heavily on witness testimony, leading to legal uncertainty.
How does a will function in Kenyan law, and what are its requirements?
A will is a legal document in which a person (the testator) expresses their wishes on how their property should be distributed after death.
Sections 5–16, Law of Succession Act, govern testamentary capacity, formalities, and execution of wills.
Legal Requirements for a Valid Will:
- Testator must be of sound mind and over 18 years old.
- Must be in writing, signed by the testator, and witnessed by at least two adult independent witnesses.
- Witnesses cannot be beneficiaries of the will.
- Testator must understand the implications of their actions.
- Will must clearly identify beneficiaries.
Merits:
- Full control and flexibility in distributing assets.
- Provides clarity, reducing the risk of family disputes.
- Can appoint executors and guardians for minors.
- Can be revoked or altered by the Testator at any time while they have capacity.
Demerits:
- Must undergo probate, which may take time and incur costs.
- Can be challenged on grounds of undue influence, fraud, lack of capacity, or failure to provide to dependents.
- Must be updated regularly to reflect changes in family or assets.
What is a family trust, and how does it manage estates?
A trust is a legal arrangement in which a person (the settlor) transfers assets to trustees to hold and manage for the benefit of specified beneficiaries.
The governing laws are the Trustees Act (Cap 167) (which outlines the duties and powers of trustees) and the Trustees (Perpetual Succession) Act, 2021 (which facilitates the registration of Family Trusts).
Requirements:
- Trust Deed spelling out trustees, beneficiaries, and objectives.
- Registration (unincorporated under RDA, incorporated under TPSA).
- Payment of stamp duty.
- Transfer of assets into the trust.
Merits:
- Avoids probate, assets in a trust don’t form part of the deceased’s estate.
- Enables generational wealth transfer and management.
- Protects assets from creditors or family disputes.
- Can provide for minors, dependents, or charitable causes.
- The Trust Deed is a private document.
Demerits:
- Requires legal setup and ongoing management.
- Trustee misconduct can jeopardize assets.
- Once established, an Irrevocable Trust is extremely difficult to change.
- The Settlor relinquishes legal ownership to the Trustee, though they can retain significant influence (e.g., as a Protector).
- High initial setup and maintenance costs due to professional drafting, registration, and ongoing management fees (especially with corporate trustees).
Can I use companies to manage my estate?
Using a company as an estate management tool involves incorporating a Private Limited Liability Company and transferring or holding assets through a limited liability company or holding company. Ownership is represented by shares, which can easily be transferred or inherited.
The control of the “estate” then lies in the company’s shareholding and directorship.
Merits:
- Facilitates inter-generational business continuity.
- Easier to transfer ownership through shares.
- Offers limited liability protection.
- Business continuity through perpetual succession, as the death of a shareholder does not stop the company’s operations or management.
- Provides control for undivided property, as multiple beneficiaries can share an asset through the shareholding.
Demerits:
- Requires annual compliance and governance.
- Risk of shareholder disputes if agreements are unclear.
- Corporate tax (Income Tax Act) and stamp duty on the initial transfer of assets to the company apply.
Are there other estate planning tools I should consider?
Yes, including:
- Nomination of Beneficiaries – For pensions, insurance, or SACCOs, ensures direct transfer to the nominated person.
- Powers of Attorney – Appoint trusted agents to manage your affairs in case of incapacity.
- Life Interest Clauses – Allow a spouse or parent to use property during their lifetime while ensuring eventual transfer to children.
- Regular Reviews – Update your estate plan periodically to reflect life changes.
Key practical tips to minimise disputes and preserve heritage
- Full asset inventory: Prepare a schedule of all your assets (land parcels, company shares, bank accounts, personal effects, business interests).
- Clear family communication: Explain your plans to key family members and beneficiaries so there is no surprise or perceived unfairness.
- Documentation is essential: Whether you use gifts, joint ownership, or trusts, ensure the transfers are properly documented, registered (for land), and executed.
- Regular review: Life changes (marriage, divorce, children born, business expansion, new assets) mean your estate plan should be updated.
- Balance fairness and intention: Even though you may favour one beneficiary, consider other dependants. Under s 26 LSA, the court can make orders for dependants if they are not adequately provided for.
- Keep legacy of heritage: If you wish to keep property within a family line or preserve heritage (e.g., farmland, business), use a trust or company structure that emphasizes generational continuity rather than simple transfer.
- Avoid last-minute transfers: Transfers done just before death (especially without proper formality) may be challenged as intended to defeat creditors or other heirs (look-back).
- Seek professional advice early: Don’t wait until you are ill or incapacitated; engage lawyers and accountants to consider tax, succession, family law, and company law aspects.
- Coordination of tools: Use a combination of tools (for example, joint ownership for a home with your spouse, a trust for business assets, a will for residual assets) so the whole estate is covered and there are no gaps.
- Safeguard for incapacity: Consider who will manage your assets if you become incapacitated (powers of attorney, trust management, etc.)
How Njaga & Co. Advocates LLP Can Help You Manage Your Estate
At Njaga & Co. Advocates LLP, we understand that estate planning is both a legal process and a legacy decision. Our firm has extensive experience helping clients protect wealth, preserve family harmony, and ensure smooth generational transitions.
Our Expertise Includes:
- Estate audits and planning strategy sessions.
- Drafting legally compliant wills, trust deeds, and gift instruments.
- Structuring family companies, family trusts, and drafting shareholder agreements.
- Advising on joint ownership and co-tenancy arrangements.
- Administering estates and obtaining grants of probate.
- Trustee advisory and governance support.
- Dispute prevention and mediation among beneficiaries.
Why Choose Us:
- Deep expertise in Kenyan succession law.
- Client-centric, empathetic approach.
- Proven track record in dispute prevention and resolution.
- Tailored solutions for diaspora and high-net-worth clients.
Your estate represents years of hard work and sacrifice. Don’t leave its future to chance or court battles. Whether you’re a professional, retiree, or business owner, start managing your estate today, with professional guidance that ensures your loved ones inherit peace, not conflict.
Let us help you design a legally sound, tax-efficient, and dispute-proof estate plan that endures generations.
How Njaga & Co. Advocates Can Assist
At Njaga & Co. Advocates LLP, we are a leading corporate and commercial law firm in Nairobi, Kenya, helping foreign and diaspora investors navigate Kenya’s business landscape seamlessly and with confidence.
Our Services Include:
- Advising on the optimal structure: branch vs subsidiary
- End-to-end registration and compliance support
- Drafting constitutive documents and shareholder agreements
- Tax structuring and compliance advisory
- Immigration and work permit facilitation
- Ongoing legal and regulatory support
Whether you’re expanding into Kenya or formalising your presence, we ensure your entry is strategic, compliant, and future-ready. Contact us today to schedule a consultation and let our corporate law experts help you seamlessly establish your presence in Kenya.
Disclaimer: This article provides general information and does not substitute legal advice on specific circumstances of any individual or organization. While the information is accurate as of the date published, we cannot guarantee it remains accurate at the time you read it or that it will stay current. Before acting on any of this information, please seek professional legal advice tailored to your situation.
