Property disputes are an order of the day in Uganda and neighboring countries, where the law of trust has not well been streamlined to meet the current needs and aspirations of those that intend to inherit or transfer property to relatives, loved ones or purchased property.
The property wrangles are common within land, housing and to some extent business empires, where spouses and children of a deceased husband, tussle in courts of law to ascertain who takes the lion’s share of the property or who gets completely nothing.
It’s against this background that the Uganda Law Reform Commission (ULRC) and stakeholders are embarking on the long journey, to review the law of trust and come up with a lasting solution to property wrangles, and in addition streamline property ownership laws to attract investors in the country.
For the last two months or so, Uganda Law Reform Commission has kicked off preliminary stages to review and streamline the Law regarding Trusts in Uganda in order to align it to modern trends in trust regulations.
According to ULRC, Trusts form an important part of Uganda’s economic and social life. The Law of Trust acts as instruments for preserving family wealth, charity, investment, land management and finance investment.
“Consequently, trusts are an important component of the economy. Trusts guarantee the protection of the property of the settlor by ensuring that the property is not liable to litigation or attachment since it is held by a third party (trustee). Trusts can be used to protect assets from being subject to claims from creditors”, ULRC source says in part.
Late last month, ULRC organized a series of stakeholder consultative workshops with members of the Legal and Parliamentary Affairs Committee, judges, magistrates, members of the interreligious council, legal practitioners, financial institutions and the private sector at Hotel Africana in Kampala.
Dr. Dan Twebaze, the Managing Director, Twed Property Development has volunteered to sponsor three consecutive consultations in the review of Law of trusts, which governs property ownership and development in Uganda.
He also said that the Law of trusts is very important to attract investors in the country, calling upon legal experts to expedite the review of the current law, as it lacks both content and substance.
“As Twed Property Development, we are willing to fund the next three consultations on the Law of trusts to create a fair Law of trustees in Uganda, “he said, amidst applause from participants at the consultative meeting.
ULRC defines a trust as a relationship that arises whenever a person called the trustee, holds property for the benefit of some other persons who are termed beneficiaries. Dr. Twebaze argues that; the Law of trusts in Uganda does not protect investors on customary land because it’s not their property.
“The Law of trusts needs to be amended to expand the powers of the trustee if we are to promote investments in Uganda, “he added.
ULRC states that; the pertinent questions to provide clarity on Trust Law concern whether or not the Trustees Incorporation Act, Public Trust Act and Succession Act should be consolidated for easy access to the law, whether or not there should be a uniform definition of trust, and the question of perpetual succession.
“People should differentiate between a will and a Trust. A will prescribes wishes whereas a trust concentrates on the management of the property,” said Sam Kiriaghe, one of the consultants at the meeting.
Robert Kirunda, a Legal consultant on the Law of trusts at the meeting, labored to explain the bottlenecks of the Law of trusts in Uganda at the moment. He said trusts Laws are one of the underrated Laws in Uganda because the Law has a lot of what he termed as “Ambiguity”.
He said the Law of trusts does not clearly spell out the powers of an estate administrator, when it comes to transfer of ownership to another person.
“Can an administrator of an estate give powers of Attorney to Another person? The powers are supposed to be given by a competent court. The question of trust goes hand in hand with the legal framework, “he said.
The Trust Law also intends to look into the powers of a trustee for instance whether or not the trustee should have powers to delegate and should be opened and widened to cover administration and discretionary powers.
In addition, the law will delve into revocation, modification and termination of Trust especially the role of the court in enforcing trust instruments and the trustees’ obligations.
In response, legal experts at the review meeting expressed several inputs to the law.
Prof. Bakibinga David of Makerere University called on the public to understand who the trust is in the management of the property.
Prof. Bakibinga said; there shouldn’t be controversy on the determination of the method of appointment of a trustee who is eligible to be a trustee, who appoints and so on because the powers to choose a trustee lie in the hands of who owns the property.
The CEO Uganda Muslim Lawyers Association, Sirajje Mukasa Katantazi, called upon the Law Reform Commission to involve clarification on the renunciation of trustees, creation of regulators, and barring the central bodies from intervening in the local community Trusts.
Dr. Ronald Kakungulu Mayambala, during panel discussions, said Uganda Law of trusts conflicts with some foreign Laws, which discourages investors.
“For example, traditional courts are also recognized in Uganda to handle matters of trusts, especially on inheritance of property of dead family members, which may contradict with some foreign Laws regarding inheritance, “he said.
Dr. Kakungulu in addition said the Ugandan Law of trusts on inherited property has been invaded by greed, where those entrusted with holding property on behalf of a family end up selling off or grabbing the property fraudulently.
“We have been invaded by a strong culture of greed, especially on land issues. We should come up with a Law to deal with distrust, “he said.
He said there is also a need to ensure the Law of trusts addresses the traditional trustees and allow trustees’ powers to take decisions, instead of going by the will of the dead people, especially on matters of property inheritance.
In neighboring Kenya, the law of trust continues to be a subject of scrutiny among legal scholars and the public.
William Maem, a Senior Partner at Iseme, Kamau & Maema Advocates in his recent article published with; https://www.businessdailyafrica.com/bd/opinion-analysis/columnists/the-era-of-trust-fund-babies-finally-is-here-4278728, said; the Law of Succession Act stipulates that where a person dies intestate, that is, without leaving a valid will, their earthly possessions are inherited by their family in descending order, starting with the spouse, children, parents and, finally, relatives of all shades and form up to the sixth degree of consanguinity at the bottom of the food chain children, parents and, finally, relatives of all shades and form up to the sixth degree of consanguinity at the bottom of the food chain.
Mr. Maem cites an example of a wealthy Kenyan, notorious for his English mannerisms and adoration of Queen Elizabeth was made public, many Kenyans gawked in wonderment, doubting whether what he had disclosed in the will was all he owned and, if not, where the rest was.
“Contrary to what has, shamefully, become Kenyan culture in recent years among the propertied class, there is no report to date of any court case filed by family members or others seeking a slice of the vast estate. Did he, perhaps, know something that other wealthy Kenyans do not know?”, Mr. Maem article reads in part.
He said as Kenyans advance in age, they increasingly become paranoid about their mortality, adding that Kenyans act as if in fear of a malevolent deity waiting to punish them upon arrival at the hereafter should they fail to leave all their earthly possessions to their offspring before signing off from this world.
According to Mr. Maem, the Trustee (Perpetual Succession) (Amendment) Act, 2021 created an enabling legal framework for transferring wealth during one’s lifetime to a family trust instead of the children directly.
“Kenyans should, therefore, rethink their pathological fixation with the desire to saddle their offspring with the burden of wealth which may be beyond their capacity to manage”, he adds.
By Ambrose Gahene.