Published: July 2026 | Last reviewed: July 2026
Author: Victor Mulindi, Advocate of the High Court of Kenya | KNK Advocates LLP
Practice Area: Estate Planning & Succession
Content Classification: Evergreen
Estimated Read Time: 8 min read
Table of Contents
- What Is a Family Trust and Why Kenyan Families Use One
- The Njenga Karume Trust: A Cautionary Tale
- What the Law Requires of a Trustee
- What Can Go Wrong: Practical Risk Areas for Kenyan Families
- KNK Advocates’ Recommendation
- Frequently Asked Questions
Introduction
A family trust is often sold as the safer alternative to a will: assets move to trustees during your lifetime or on death, professional management continues seamlessly, and your family avoids the courtroom battles that plague so many Kenyan estates. For many families, that promise holds. For others, the trust itself becomes the battlefield.
Kenya’s most instructive lesson on this comes from one of the country’s wealthiest families. It shows both why family trusts remain a powerful estate planning tool and why the choice of trustee, and the mechanisms to hold them accountable, matter as much as the trust document itself.
What Is a Family Trust and Why Kenyan Families Use One
A family trust is a legal arrangement in which a founder (settlor) transfers property to trustees, who hold and manage it for the benefit of named beneficiaries, according to the terms set out in a Trust Deed. In Kenya, trusts are governed principally by the Trustees Act (Cap. 167), which sets out trustees’ powers and duties, and the Trustees (Perpetual Succession) Act (Cap. 164), under which a body of trustees can be incorporated to give the trust continuity beyond the lives of individual trustees.
Families turn to trusts for several practical reasons:
- Continuity of management. A trust can keep a business empire, farmland, or rental property portfolio running under professional management rather than freezing operations while a grant of probate is processed.
- Avoiding fragmentation. Rather than splitting a single asset among multiple heirs who may not be able to run it jointly, a trust can hold the asset intact and distribute income or benefits instead.
- Providing for dependants over time. Trusts can structure ongoing support such as school fees, medical care, and maintenance, rather than a single lump-sum distribution that may be mismanaged or exhausted.
- Confidentiality. Unlike a grant of probate, which is a public court record, a trust deed is typically a private document.
These are genuine advantages. But every one of them depends on trustees who are diligent, transparent, and faithful to the founder’s wishes. When that assumption fails, a trust can trap beneficiaries in exactly the kind of prolonged, expensive dispute it was meant to avoid.
The Njenga Karume Trust: A Cautionary Tale
The late Hon. Njenga Karume, a prominent Kenyan Cabinet Minister and businessman, transferred 99% of his business empire, spanning hotels, farms, and property companies, into a private family trust before his death in 2012, appointing trustees to manage it for his children and grandchildren.
Within three years, three of his children filed suit against the trustees in Albert Kigera Karume & 2 others v George Ngugi Waireri & 3 others (sued as Trustees of the Njenga Karume Trust & another); Grace Njoki Njenga Karume & 7 others (Interested Parties) [2020] eKLR (Civil Case No. 125 of 2015, High Court at Nairobi). The beneficiaries alleged that the trustees had:
- Appointed new trustees without consulting the beneficiaries or following the succession procedure set out in the Trust Deed;
- Failed to account for KES 280 million left over from the sale of land to the Kenyatta University Retirement Benefit Scheme;
- Failed to provide audited accounts or regular financial statements to the beneficiaries, in some years for several years running;
- Made unexplained payments to themselves as “responsibility allowances” while beneficiaries went without school fees and medical support;
- Sold trust property, including a family home the beneficiaries were living in, without notifying or consulting them; and
- Placed themselves in conflicts of interest, including one trustee’s relative purchasing trust land and another trustee purchasing a trust-owned apartment.
On 7 May 2020, Justice Roselyne Aburili delivered a 136-page judgment removing all three trustees, George Ngugi Waireri, Kung’u Gatabaki, and Margaret Nduta Kamithi, from office. The court found that the appointment of two of the trustees had itself been irregular, in breach of the Trust Deed’s own succession clause, and that the trustees had failed in their duty to keep and render accounts, their duty to act impartially among beneficiaries, and their duty to avoid conflicts of interest. The court ordered the removed trustees to render a full account of every transaction since February 2012, with the question of personal liability and indemnity to be determined once those accounts were filed.
Media coverage at the time noted a particularly stark illustration of the human cost: one of the founder’s grandchildren, who was fighting cancer, reportedly could not access already-authorised trust funds for her treatment in time. The court found this kind of delay unacceptable and inconsistent with the trustees’ duties to the beneficiaries.
The case remains a landmark because it did not merely settle a family dispute. It confirmed, at High Court level, that Kenyan courts will actively supervise private family trusts, will remove trustees who breach their duties regardless of how prominent or well-connected they are, and will not simply defer to a trustee’s discretion where that discretion has been exercised in bad faith or without accountability.
What the Law Requires of a Trustee
Kenyan courts have consistently held trustees to a high standard, and a breach does not need to be intentional to create liability. As stated in Republic v Retirement Benefits Appeals Tribunal Ex Parte Augustine Juma & 8 others [2013] KEHC 1696 (KLR), a breach of trust is established once it is proven, regardless of whether the trustee acted innocently, negligently, or intentionally. Similarly, in Josphat Mbogo Kaguongo & another v Geoffrey Muriuki Kimondo & 3 others [2021] eKLR, the court affirmed the long-standing principle that a trustee is liable for breach of trust if they fail to do what their duty requires, or do what they are not entitled to do as trustee.
The core duties a trustee owes to beneficiaries under Kenyan law and equity include:
- Duty to know and adhere to the terms of the trust. A trustee must understand and faithfully carry out the Trust Deed, including any procedures for appointing successor trustees.
- Duty to account. Trustees must keep proper books of account and render regular, transparent financial statements to beneficiaries. This was the central failure in the Karume case.
- Duty to act impartially. Where there are multiple beneficiaries, a trustee cannot favour some over others without justification tied to the trust’s objectives.
- Duty of loyalty and to avoid conflicts of interest. A trustee must never place personal interests, or those of close relatives, ahead of the beneficiaries’, and must disclose any potential conflict before it arises.
- Duty of efficient management. Trustees are expected to manage trust assets with at least the diligence of a prudent person managing their own affairs, not merely to avoid active wrongdoing.
Older Court of Appeal authority, Stephens & 6 others v Stephens & another [1987] eKLR, confirms that these obligations, and the consequences of breaching them, have deep roots in Kenyan succession and trust law; this is not a novel or imported standard.
What Can Go Wrong: Practical Risk Areas for Kenyan Families
Drawing on the Karume litigation and the broader body of Kenyan trust case law, families setting up or currently governed by a trust should watch for:
- Opaque successor-trustee appointments. Trust Deeds typically specify how a departing trustee is replaced. Deviating from that process, even with good intentions, can itself become grounds for removal.
- Delayed or missing accounts. A trustee who cannot produce timely, audited financial statements when asked is exhibiting the single most common warning sign identified by Kenyan courts in trust disputes.
- Self-dealing. Trustees, or their close relatives, are purchasing trust assets or benefiting from trust transactions without full disclosure and independent valuation.
- Discretionary clauses used to avoid accountability. Broad “absolute discretion” clauses in a Trust Deed do not exempt trustees from the duty to act fairly.
- Beneficiary disunity exploited by trustees. Where a family is already divided, an unaccountable trustee can entrench their position by favouring the faction that supports them.
KNK Advocates’ Recommendation
None of this means family trusts should be avoided. It means they should be built and governed with the same rigour as any major corporate transaction. Before establishing a family trust, KNK Advocates advises clients to build in mandatory annual audited accounts to all beneficiaries, a clear and workable successor-trustee mechanism that does not depend on informal consensus, and independent oversight, such as a protector or an accountant appointed specifically to monitor the trustees on the beneficiaries’ behalf.
For families already inside a trust where trustees are unresponsive, Kenyan law gives beneficiaries real remedies: an application under the Trustees Act for accounts, and, where warranted, an application to the High Court for removal and replacement of trustees, exactly as occurred in the Karume case. Beneficiaries should not wait years, as happened there, before seeking that accounting.
Anyone establishing, reviewing, or disputing a family trust should engage the Estate Planning & Succession practice early, before disputes calcify into the kind of decade-long, asset-eroding litigation the Karume family experienced.
A family trust lets a Kenyan property owner transfer assets to trustees who manage them for named beneficiaries, often across generations, avoiding the delays of probate. But a trust is only as reliable as its trustees. When trustees fail to account, favour themselves, or ignore the founder’s wishes, Kenyan courts can and do remove them, as seen in the Njenga Karume Trust litigation, which cost one family a decade of disputes and its flagship hotel asset.
8. FAQ Section
Why do Kenyan families set up family trusts instead of just writing a will?
Family trusts allow continuity of management for businesses, farms, or property portfolios without the delays of a probate process, and can structure ongoing support such as school fees and medical care rather than a single lump-sum distribution. They also generally remain private, unlike a grant of probate, which is a public court record.
What happens if a trustee fails to give beneficiaries financial accounts?
Failure to keep and render proper accounts is a breach of a trustee’s core duty under Kenyan trust law. In the Njenga Karume Trust case, this failure, spanning several years, was one of the central grounds on which the High Court removed the trustees and ordered them to produce a full account of every transaction since 2012.
Can a Kenyan court remove a trustee?
Yes. Under Section 42 of the Trustees Act (Cap. 167), the High Court has the power to appoint new trustees in substitution of existing ones where it is expedient to do so, as part of its inherent jurisdiction to supervise the proper administration of trusts.
Does a trustee have to prove they acted dishonestly to be found liable for breach of trust?
No. Kenyan courts have held that a breach of trust is established once proven, regardless of whether the trustee acted innocently, negligently, or intentionally.
What are the most common warning signs that a family trust is being mismanaged?
Common warning signs include delayed or missing audited accounts, trustees or their relatives benefiting from trust transactions without disclosure, successor trustees appointed outside the process set out in the Trust Deed, and unequal treatment of beneficiaries.
Will a Kenyan court dissolve a family trust if trustees are found to have failed?
Not necessarily. Courts have been clear that their role is to uphold and protect a trust, not destroy it. The usual remedy is removal and replacement of the failing trustees.
How long can a family trust dispute take to resolve in Kenya?
The Njenga Karume Trust case took roughly five years from filing (2015) to judgment (2020), and the accounting and liability phase continued afterward.
What should families do before setting up a family trust to avoid these problems?
Families should build mandatory annual audited accounts into the Trust Deed, ensure the successor-trustee mechanism is clear, and consider independent oversight of the trustees. KNK Advocates regularly advises families on structuring trusts to prevent exactly this kind of dispute.
Sources / References
- Albert Kigera Karume & 2 others v George Ngugi Waireri & 3 others [2020] KEHC 9609 (KLR) / [2020] eKLR, Civil Case No. 125 of 2015, High Court at Nairobi, Aburili J, 7 May 2020
- Josphat Mbogo Kaguongo & another v Geoffrey Muriuki Kimondo & 3 others [2021] eKLR
- Stephens & 6 others v Stephens & another [1987] eKLR, Civil Appeal No. 18 of 1987, Court of Appeal at Mombasa
- Republic v Retirement Benefits Appeals Tribunal Ex Parte Augustine Juma & 8 others [2013] KEHC 1696 (KLR)
- Trustees Act (Cap. 167), Laws of Kenya, including Section 42
- Trustees (Perpetual Succession) Act (Cap. 164), Laws of Kenya
- Media: Citizen Digital, Capital Business, Daily Nation, The Star,
Editorial note: This is a settled 2020 High Court judgment with no reported appeal identified at the time of writing.
9. Legal Disclaimer
⚠️ Legal Disclaimer
The content of this article is published by Khayesi & Khayesi Advocates LLP for general informational and educational purposes only. It does not constitute legal advice and must not be relied upon as such.
Reading this article does not create an advocate-client relationship between you and Khayesi & Khayesi Advocates LLP or any of its advocates. The information provided reflects Kenyan law as at the date of publication and may not account for subsequent legislative changes, court decisions, or the specific facts of your situation.
Legal advice is fact-specific. A position that applies generally may not apply to your circumstances. To receive formal legal advice on your matter, you must formally engage Khayesi & Khayesi Advocates LLP by entering into a signed Letter of Engagement, at which point an advocate-client relationship will be established and privileged legal advice can be provided.
To begin the engagement process, contact us at [email protected], call +254 711 472 518, or book a free consultation.
Need Expert Legal Advice in Kenya?
Khayesi & Khayesi Advocates LLP (KNK Advocates) is a full-service law firm based in Nairobi, Kenya, with more than 25 years of combined experience in estate planning and succession.
We Know The Law, We Love The Law.
Whether you are a business, entrepreneur, or individual navigating Kenya’s legal landscape, our team is here to move you forward.
📞 +254 711 472 518
Follow us: @knklegal | @knk_legal
