A trust is a fiduciary arrangement that creates a relationship between the natural/ legal person transferring property i.e. settlor, the person who holds the property on behalf of a third party i.e. the trustee, and the third party who receives the property i.e. beneficiary. Trusts can be unincorporated or incorporated and the difference between the two will be on how it’s registered. For the unincorporated trust, one will make an application for a trust deed to be registered. The said trust deed will indicate the name of the trust, its objectives, the name of the trustees, and the powers of the trustee. The application to register the trust will be lodged in the trust registry under Business Registration Services (BRS). The Statute Laws (Miscellaneous Amendment Act, 2024 moved the registration from the Lands Registry to the BRS. Unincorporated trusts are not identified as separate legal entities. This implies that they can only own property, enter into contracts or do any other thing in the name of its trustees but not in the name of the trust.
A trust can also be created through incorporation in accordance with the Trustees (Perpetual Succession) Act and in this case, the trust will be considered as a separate legal entity. In making the said application, one will be required to avail to the registrar of companies the name of the trust; the trust constitution which can either be a trust deed or a will; objectives of the trust; personal details of the settlor, trustee and beneficiaries and the statement of initial trust assets. Once the application is accepted, the Registrar shall issue a certificate of incorporation which will be conclusive proof that the trust is duly incorporated.
Types of trust
- Charitable trust:- which is usually formed for the exclusive purpose of the relief of poverty, advancement of education, religion or human rights and fundamental freedoms, or the protection of the environment or any other purpose beneficial to the general public.
- Non-charitable trust: which may be created for a specific purpose notwithstanding the absence of any beneficiary.
- Family trust: which may take effect either during the life or after the death of the settlor, it can also be partly charitable or non-charitable, it can also be registered or incorporated by any person or persons, whether jointly or as an individual, for the purposes of planning or managing their personal estate.
All trusts are deemed to be irrevocable unless the settlor expressly states during his lifetime that it is revocable.
