Trust funds are essential financial and legal instruments that enable individuals, families, and organizations to manage and safeguard assets for specific purposes or beneficiaries. In Uganda, trust arrangements play a critical role in estate planning, wealth management, and safeguarding the welfare of vulnerable individuals.
The governance of trust funds in Uganda is rooted in a comprehensive legal framework, ensuring the effective creation, administration, and enforcement of trusts. This framework is supported by key legislative provisions, including the Trustees Act, Public Trustees Act, and other laws addressing taxation, succession, and property management. Together, these laws ensure transparency, accountability, and protection for both trustees and beneficiaries.
This article explores the core laws governing trust funds in Uganda, providing insights into their application and relevance in various contexts, such as estate planning, corporate management, and the care of vulnerable individuals. Understanding these legal provisions is crucial for anyone considering setting up or managing a trust in Uganda. These laws create a comprehensive framework for the establishment, management, and enforcement of trusts in Uganda, addressing various contexts and needs;
1.Trustees Act, Cap 164
This Act provides the framework for the appointment, powers, duties, and liabilities of trustees. It governs the administration and management of trust property, including investments and distributions, ensuring trustees act in beneficiaries’ best interests.
2. Trustees (Incorporation) Act, Cap 165
The Act allows groups or bodies of trustees to incorporate, granting them legal personality. Incorporated trustees can own and manage property in their corporate name, ensuring continuity and simplifying dealings
3. Public Trustee Act, Cap 162
The Act establishes the office of the Public Trustee, who can act as a trustee in situations where private trustees are unavailable, unwilling, or unable to serve. It is particularly relevant for trusts involving minors, vulnerable persons, or unclaimed estates.
4. Trust Corporations (Probate and Administration Act) Cap 163
This Act recognizes trust corporations as entities eligible to act as executors or administrators of estates. Trust corporations manage estates or trusts more effectively due to their perpetual succession and organizational capacity.
5. The Succession Act Cap 162 as (amended)
This Act comes into play where trusts are created through wills. It governs how property is managed on behalf of beneficiaries, especially minors or vulnerable individuals.
6. The Income Tax Act Cap 340 (as amended)
The Income Tax Act governs the taxation of trusts, including income derived from trust assets and its distribution to beneficiaries. In the 2021 amendment, the Act expanded the definition of a beneficial owner in relation trusts and legal persons. In respect to trusts, a beneficial owner includes the settlor, trustee, protector, beneficiaries, and any other natural person exercising absolute control of the trust.
7. The Registration of Titles Act (RTA) Cap 230
This provides legal guidance on how land held in trust is managed and recognized. It governs the legal ownership of trust land while equitable principles address beneficiaries’ rights and disputes.
8. Mental Health Act, 2018
This Act allows the appointment of trustees to manage the property of persons with mental health conditions. Trustees act in the best interests of these individuals, ensuring their property is preserved and used appropriately.
These laws, when applied collectively with common law, case law, and other relevant legislation, establish the legal framework for the application of trust principles in Uganda, ensuring that assets are preserved and used as intended. Understanding and applying these laws is essential for trustees, beneficiaries, and stakeholders to ensure compliance, accountability, and the fulfillment of trust objectives. For personalized guidance, always consult a qualified estate planning professional.
Disclaimer: This blog post is for informational purposes only and does not constitute financial or legal advice. Always consult with a qualified professional for personalized guidance.
