By: Lucille N.Y Cash-Abbey

In conversations about inheritance and estate planning, many people think only about writing a Will. But there is another powerful tool that is often overlooked: A TRUST!!

Unlike a will, which simply states who should inherit your property after your death, a trust allows you to control how and when those assets are used, sometimes even while you are still alive.

What is a Trust?

A trust is a legal arrangement where one person, known as the settlor, places assets such as money, land, or investments under the care of another person or institution, known as the trustee. The trustee is then responsible for managing those assets on behalf of a third party, the beneficiary.

Think of a trust as a protective container or a safety deposit box. The trustee holds the keys to the box, but the contents are for the beneficiary’s use, not the trustee’s. Everything is governed by a written document called a trust deed, which sets out the rules.

Key Elements of a Trust

• Settlor: The person who creates the trust and transfers assets into it.
• Trustee: The person or institution managing the assets responsibly.
• Beneficiary: The person(s) who benefit from the trust.
• Trust Property: The assets placed in the trust.

Types of Trusts

• Living Trusts: Created while the settlor is still alive, often used to manage assets and avoid lengthy probate processes.
• Testamentary Trusts: Established under a will, and only take effect after the settlor’s death.
• Charitable Trusts: Created for causes such as education, healthcare, or social welfare.

Should a trust be registered or incorporated to be recognised by law?

Most trusts do not need to be registered or incorporated before they are valid. A trust comes to life once three key elements exist:

• a settlor with the intention to create the trust,
• identifiable trust property, and
• clearly named beneficiaries.

That’s it! No fanfare, no Office of the Registrar of Companies (ORC) stamp, and no incorporation certificate.

However, registration becomes important depending on the type of property involved. For example:

• If the trust holds land, the interest in the land must be registered at the Lands Commission.
• If the trust operates like a charity, then registration under the relevant laws and statutory agencies such as the ORC, may be required.

Think of it like this, the trust itself doesn’t need to be registered, but the assets inside may need to be.

Can a trustee misuse trust assets for personal gain? What remedies exist?

A trustee is supposed to be the “responsible adult” in the trust relationship. The law places them under strict duties—loyalty, honesty, and accountability. This is known as Fiduciary duty.
So, in theory, a trustee should not and must not misuse trust assets; in practice… well, humans will be humans.

If a trustee misuses or misappropriates assets, the law provides firm remedies, including:

• Removal of the trustee by the court;
• An order to account, meaning they must show exactly how every pesewa was used;
• Restoration of the property, so any misused funds are paid back from the personal coffers of the trustee;
• Damages, if beneficiaries suffered a loss.

Trustees are fiduciaries, and courts treat breaches of trust very seriously. They do not get to enjoy trust assets and use them like their personal shopping fund.

What happens if a trustee dies? Who appoints or replaces a trustee?

Trusts are designed to survive the humans managing them. If a trustee passes away, the trust does not collapse.

A replacement can be appointed in several ways:

1. By the trust instrument itself
   Most trust deeds include a clause stating how new trustees should be appointed.
2. By the surviving trustees
   If more than one trustee existed, the remaining trustee(s) can usually appoint a replacement. I highly recommend more than one trustee.
3. By beneficiaries (in limited cases)
   Some trust arrangements allow beneficiaries to participate in selecting or approving a new trustee.
4. By the court
   If the deed is silent or the parties cannot agree, the court steps in to appoint a suitable trustee.

The goal is always to ensure the trust continues smoothly without interruption.

Can beneficiaries replace a trustee?

Yes, in some circumstances.

Beneficiaries cannot simply wake up one morning and vote someone out like a reality show contestant. However, they may replace a trustee when:

• the trust deed gives them that power and authority to do so, or
• the trustee is acting improperly, and the beneficiaries apply to the court for removal.

Courts are more than willing to remove trustees who are unfit, conflict-prone, or simply not performing their duties. Beneficiaries’ welfare is the heart of trust law, so their concerns carry weight.

Why Create a Trust?

1. To protect vulnerable beneficiaries; for example, parents of young children can ensure their inheritance is managed until the children are of age.
2. To manage wealth across generations; a trust ensures assets are not squandered but preserved and in some cases grown.
3. To avoid disputes; just like in Wills, clear trust instructions reduce family conflicts after death.
4. To provide flexibility; Unlike a will, a trust can operate during your lifetime and continue after your death.

Trusts vs. Wills

• A will states who inherits your property.
• A trust controls how and when that property is managed or given out.

Conclusion

Trusts may sound complex, but they are simply another way of making sure your loved ones are taken care of and your wishes are respected. Understanding and using a trust can give you peace of mind and protect your family from unnecessary stress.

If you have assets you want to preserve for your children, dependents, or even for charitable causes, a trust may be the key. The important step is to seek proper legal advice and set it up correctly.

ENDS