Wealth, Succession, and Legacy: Essential Estate Planning for Kenyans

 

Wealth, Succession, and Legacy: Essential Estate Planning for Kenyans

Estate planning is often misunderstood as a tool reserved for the ultra-wealthy. In reality, it is a fundamental component of financial security, legal risk management, and intergenerational wealth preservation for anyone with assets, dependents, or business interests.

In Kenya’s evolving economy — where families are increasingly cross-border, businesses are complex, and regulatory frameworks continue to grow in sophistication — a well-crafted estate plan is indispensable.

At CM Advocates LLP, our Private Wealth & Family Business Advisory Unit works with individuals, families, and entrepreneurs to design estate planning strategies that not only align with Kenyan succession laws but also reflect the rigor, foresight, and global standards applied by leading international law firms.

Why Estate Planning Matters in Kenya

Kenya’s wealth and business landscape is rapidly transforming. While opportunities for wealth creation have expanded, so too have the risks facing families and entrepreneurs.

Key Risks:

• Rising family disputes over inheritance and succession.
• Increasingly complex family structures and cross-border investments.
• Evolving tax and regulatory obligations.
• The recent decline in the number of dollar millionaires (as reported in Business Daily, Aug 2025), underscoring the need for proactive protection.

Our Value:

Without a structured plan, families face the danger of prolonged legal disputes, avoidable tax liabilities, and erosion of wealth. Estate planning is therefore not just about asset distribution, but about building continuity, governance, and the preservation of legacies.

Core Estate Planning Strategies and Tools

1.                  Wills & Testamentary Planning

Wills are the foundation of estate planning, ensuring clarity on how assets will be distributed. They help minimize disputes and safeguard personal wishes.

Key Benefits:

• Avoiding intestate succession under the Law of Succession Act (Cap 160), which may not reflect personal wishes.
• Reducing family disputes by setting out clear instructions.
• Aligning asset distribution with tax and governance considerations.

Our Tools:

• Kenyan wills – fully compliant with domestic succession laws.
• International wills – for globally mobile clients with foreign assets.
• Codicils and testamentary letters – to safely amend existing wills.

These instruments ensure legal certainty while integrating family and tax planning.

2.                 Trusts & Fiduciary Structures

Trusts are a cornerstone of modern estate planning, used to:

• Protect wealth from creditors or intra-family conflicts.
• Manage assets for minors or vulnerable beneficiaries.
• Enable intergenerational transfer of wealth within structured governance frameworks.

Our Tools:

• Family trusts – registered locally for Kenyan assets.
• Offshore trusts – for international asset holding and global compliance.
• Special purpose trusts – for education, business succession, or philanthropy.

These structures provide asset protection, governance, and flexibility, benchmarked against best practices in leading jurisdictions.

3.                 Family Business Succession Planning

Family enterprises are central to Kenya’s economy, yet many do not survive beyond the second generation without structured succession.

Key Benefits:

• Preserving business continuity through governance structures.
• Reducing family disputes and protecting shareholder value.
• Ensuring long-term alignment between family and business interests.

Our Tools:

• Family constitutions – defining governance, roles, and responsibilities.
• Shareholder agreements – structuring ownership transitions.
• Trust-owned business structures – where family trusts hold controlling stakes.
• Governance boards and advisory committees – overseeing management and strategy.

These tools safeguard family businesses, ensuring stability across generations.

4.                Cross-Border & International Estate Planning

Kenyan families increasingly hold assets across multiple jurisdictions, creating risks of conflicting laws and double taxation.

Key Benefits:

• Minimizing cross-border legal disputes.
• Reducing double taxation exposure.
• Ensuring seamless global administration of estates.

Our Tools:

• Dual or multiple wills – compliant with both Kenyan and foreign laws.
• Offshore trusts and holding structures – protecting international assets.
• International foundations – consolidating philanthropy and legacy planning globally.

This approach ensures global compliance, efficiency, and continuity.

5.                 Powers of Attorney & Guardianship Arrangements

Incapacity planning is vital to safeguard family security and asset management.

Key Benefits:

• Maintaining financial and legal control during incapacity.
• Ensuring dependents’ care and security.
• Providing clarity on healthcare and personal decisions.

Our Tools:

• Durable powers of attorney – enabling trusted representatives to act.
• Guardianship arrangements – protecting minors and vulnerable dependents.
• Advanced healthcare directives – legally guiding personal healthcare choices.

These instruments ensure decision-making continuity and family protection.

6.                Charitable Giving & Legacy Foundations

Philanthropy is an increasingly important dimension of wealth planning for Kenyan families and entrepreneurs.

Key Benefits:

• Structuring giving for tax efficiency.
• Establishing long-term family-led philanthropic initiatives.
• Creating measurable social and community impact.

Our Tools:

• Charitable trusts – with robust tax and governance frameworks.
• Family foundations – institutionalizing family-led giving.
• Endowments and donor-advised funds – supporting sustainable philanthropy.

These structures blend legacy preservation with community impact, aligned with Kenyan law and international best practice.

Our Approach at CM Advocates LLP

What distinguishes our practice is our commitment to international best practice and multidisciplinary integration:

• Holistic Solutions – blending legal, tax, fiduciary, and governance expertise.
• Benchmarking with Leading Global Firms – strategies reflecting the rigor applied by top firms in London, New York, Dubai, and Singapore.
• Multidisciplinary Expertise – collaboration with tax consultants, governance specialists, and fiduciary advisors.
• Tailored Client Service – each plan designed for the unique circumstances of family entrepreneurs, globally mobile executives, and high-net-worth individuals.
• Governance-Centric Approach – embedding oversight structures to preserve wealth integrity and ensure generational continuity.

Conclusion

Estate planning in Kenya is not simply about asset distribution; it is about strategically preserving wealth, embedding governance, and safeguarding family and business legacies.

Whether securing family wealth, ensuring business continuity, or managing cross-border structures, a robust estate plan provides resilience, clarity, and peace of mind.

📩 To commence your estate planning journey with CM Advocates LLP, contact our Private Wealth & Family Business Advisory Unit:
✉️ privatewealthlawyers@cmadvocates.com or Cyrus Maina at cmaina@cmadvocates.com

Head Office – Nairobi, Kenya
I&M Bank House, 7th Floor, 2nd Ngong Avenue
E: law@cmadvocates.com

Mombasa Office – Kenya
Links Plaza, 4th Floor, Links Road, Nyali
E: mombasaoffice@cmadvocates.com

REGULATORY ALERT- CBK Releases Landmark Draft Regulations for Non-Deposit-Taking Credit Providers

 

REGULATORY ALERT
CBK Releases Landmark Draft Regulations for Non-Deposit-Taking Credit Providers

Date: August 2025
Issued by: CM Advocates LLP

Introduction

The Central Bank of Kenya (CBK) has published the Draft Central Bank of Kenya (Non-Deposit-Taking Credit Providers) Regulations, 2025, ushering in a comprehensive and robust regulatory regime for all credit providers operating outside the traditional deposit-taking framework. Developed pursuant to Section 57 of the CBK Act (Cap. 491), the draft Regulations are part of ongoing reforms aimed at promoting financial integrity, consumer protection, and systemic stability within Kenya’s credit market.

Scope of Application

The Regulations are targeted at credit providers not otherwise regulated under any other written law, including:

• Digital lenders,
• Micro-lenders,
• Buy-now-pay-later platforms,
• Peer-to-peer platforms (outside capital markets regulation).

Exemptions include:

• Licensed banks and microfinance institutions,
• SACCOs,
• Kenya Post Office Savings Bank,
• Trade credit incidental to the sale of goods/services,
• Any other entity approved by CBK.

Regulatory Milestones & Timelines

Transition Period:

• Existing providers must apply for a licence or registration within six (6) months of the Regulations coming into effect.
• Entities may continue operations during the transition but must comply with applicable CBK directives.

KEY REGULATORY FEATURES

1. Licensing vs Registration

Capital Threshold	Requirement
KES ≥ 20 million	Apply for CBK Licence
KES < 20 million	Apply for CBK Registration

Applications must be accompanied by an extensive suite of documentation, including:

• Corporate governance structures,
• AML/CFT, data protection, and credit policies,
• Fit and proper declarations, tax and CRB clearances.

2. Governance & Integrity Standards

All significant shareholders (≥10%), directors, CEOs, and senior officers must undergo CBK’s fit and proper assessment covering:

• Professional qualifications,
• Moral suitability,
• Financial soundness,
• Background checks under AML/CFT, Data Protection, and Consumer Protection laws.

3. Strictly Prohibited Activities

The draft Regulations clearly define the boundaries of non-deposit credit businesses. Prohibited activities include:

• Taking deposits or cash collateral,
• Foreign exchange trading,
• Fund transfers or payment services,
• Collecting upfront registration or membership fees from borrowers.

4. Consumer Protection at the Core

CBK embeds global best practices on responsible lending and consumer welfare. Key requirements include:

• Transparent pricing and disclosure of the Total Cost of Credit (TCC),
• Caps on recoverable interest for non-performing loans (interest must not exceed the principal),
• Prohibition of harassment, blackmail, and unethical collection methods,
• Mandatory consumer complaints mechanisms and dispute resolution procedures.

5. Data, Credit Information & Digital Ethics

• Compliance with the Data Protection Act is mandatory.
• Positive and negative credit information must be reported to CRBs.
• Negative listing must be preceded by:
• A 30-day written notice, or
• A 7-day notice for short-tenure loans (e.g., <30 days),
• Post-listing notification to affected customers within 30 days.

6. Operational & Prudential Controls

• Introduction of new products, pricing changes, or delivery channels requires CBK pre-approval.
• Notification to CBK required for:
• Use of mobile apps or paybill numbers,
• Outsourcing agreements,
• Opening or relocating business premises.
• Risk management frameworks must address credit, operational, compliance, liquidity, reputation, and IT risks.

7. Oversight, Monitoring & Enforcement

CBK is empowered to:

• Conduct on-site and off-site inspections,
• Request regular reports (e.g., complaints, loan performance, CRB reports),
• Impose administrative sanctions for non-compliance, including:
• Monetary penalties up to KES 2 million or 3x financial gain,
• Daily fines,
• Suspension or revocation of licence/registration,
• Restrictions on activities, agents, or delivery channels.

Mandatory Policies and Disclosures

Every NDTCP must develop and file with CBK:

• Credit Policy,
• Consumer Protection Policy,
• AML/CFT Policy,
• Data Protection Policy,
• Code of Conduct,
• Pricing Model showing all cost components,
• Complaints register and annual returns.

What You Should Do Now

All existing or intending NDTCPs should:

• Assess applicability of the Regulations to your business,
• Initiate licensing or registration preparations,
• Update internal policies and systems to align with CBK requirements,
• Engage legal, regulatory, and data protection experts to review compliance gaps and risk exposures.

Public Participation

CBK has invited stakeholder feedback on the draft Regulations. This is a vital opportunity for industry players, fintech associations, lenders, and investors to shape Kenya’s non-deposit credit ecosystem.

How CM Advocates LLP Can Support You

Our Financial Services Practice offers end-to-end legal and compliance support including:

• Business structuring and licensing strategies,
• Preparation and filing of CBK-compliant applications,
• Drafting policies (credit, AML, consumer protection, data),
• Training boards and staff on governance and regulatory obligations,
• Representing clients in regulatory engagements and reviews.

Contact Us

Head Office – Nairobi
I&M Bank House, 7th Floor, 2nd Ngong Avenue
📧 cmaina@cmadvocates.com or law@cmadvocates.com

Mombasa Office
Links Plaza, 4th Floor, Links Road, Nyali
📧 mombasaoffice@cmadvocates.com