TRUST FUNDS

While this is very unpopular in Kenya but very famous in the West, Trust Funds are a great way to protect you assets. A Trust Fund is a document created establishing a contract between yourself and Mahia-ini Consultancy Services whereby you create a fund for your beneficiaries.

Monetary interest is held by Mahia-ini Consultancy Services on behalf of your Beneficiaries, subject to the defined terms of execution (based on your expectations on who and how much will benefit from the Trust Fund).

Trust Funds in this situation are designed in a way that the benefits of the Trust Funds belong to the Settlor in their lifetime so that in the event the Settlor decides to revoke the Trust Fund, all monetary interest will be vested in the Settlor rather than the Beneficiaries.

How a Mahia-ini Consultancy Services Trust Fund is unique & how it will help you:

1. Creditor Protection

Property transferred to the Trust Fund is no longer owned by the settlor (or the beneficiaries) and therefore should not be subject to claims from future creditors, provided certain conditions are met at the time of settlement.

2. Protecting Against Relationship Property Claims 

Under certain circumstances, if you gift assets to your children during your lifetime, these assets may become available to their partners under relationship property laws should their relationship end. By placing these assets in a Trust Fund instead of directly in the name of your children, your children can continue to receive the benefit of those assets without the assets forming part of their personal property and therefore not subject to claims from partners. 

Furthermore, if you are married or in a de facto or civil union relationship, it is likely that part of your assets will be relationship property. Should you separate from your partner, the relationship property must be divided between the two of you. By transferring property to a Trust Fund, the assets become assets of the Trust Fund rather than your personal property and may therefore be protected from relationship property claims, subject to applicable relationship laws. 

3. Protecting Family with Illness or Special Needs

A family Trust Fund may be used to provide for children or other family members who require medical care or have special needs, or who are unable to manage their own affairs through either age or infirmity. Provisions can be made in the Trust Fund to protect against other family members who may intend to assume control of the family assets for themselves, following the death of the settlor. 

4. Protecting Against Spendthrift Beneficiaries

Trust Funds can provide for long-term protection of family assets where you have concerns about how certain family members manage their own financial affairs. The income or capital needs of family members can be provided for through the Trust Fund as their needs arise rather than handing over your assets to your children who may dispose of them in a reckless manner thus leaving them in poor financial standing in the long term.

5. Flexibility to React to Personal Change & Change in Law

Modern Trust Deeds usually include provisions which allow variation of the trusts in order to deal with personal change & changes in law. 

6. Succession Planning for the Family Business 

7. Estate Planning 

As mentioned above, subject to applicable family law provisions,  assets settled on a Trust Fund no longer form part of the settlor’s estate upon his or her death. 

8. Cost Effective and Affordable

Initial cost of setting up the Trust Fund is for the low, low price of FREE!

9. Revocable

The Settlor can cancel the Trust Fund as per their direction in the Trust Deed.

When developing your wealth planning objectives, you must first decide whether a Trust Fund is a suitable vehicle to meet your objectives. Careful consideration should then be given to how the Trust Fund is established and how it will be managed going forward.

Mahia-ini Consultancy Services is not authorised to use the property indicated for personal gain. Property dealt with inconsistently means that the Director of Mahia-ini Consultancy Company is personally liable to the beneficiaries for breach of trust and we will be required to compensate the beneficiaries fully for the loss.