It is therefore vital to acknowledge and understand the laws and regulations that govern trust law in Tanzania and the recent amendments to the said laws.
Trusts are generally advantageous since they allow the settlor to distribute the assets as they wish even after one dies and helps avoid actions from creditors and lawsuits in case of testamentary trust.
For a living trust it helps avoid probate, helps protect privacy, and provides certainty and peace of mind. For trusts within associations and organisations, a governing document like a constitution governs the relationship and administration of the trust, and there remains an efficient structure for compliance and administration.
Definition of key terms Several terms are important in understanding trust law: Trust means a legal relationship created by personal acts, by an order of the court or operation of the law, when specified property or interests are placed under the control and management of a trustee or trustees for the benefit of another party or parties, called a beneficiary or beneficiaries, or for purposes set out in the document creating the trust.
Settlors are persons who settles property on trust law for the benefit of the beneficiaries. He is also known as the grantor or donor of the said property. He creates and funds the trust. He legally transfers the asset or property to the trustee for the trustee to handle and manage it for the beneficiaries. A settlor is commonly found in living trusts and testamentary trusts.
A living trust is created by a person who places his assets and properties into the hands of trustees so that they can manage the properties for him while he is still living. A testamentary trust is found in the will of a person and only comes into existence after the person’s death stipulating how the trustees should manage and bequeath his property after his death.
A beneficiary is a person for whom the trusts are created. He/She is entitled of benefits from the trust arrangement. In trusts of organisations and associations, the beneficiaries must be a definite segment of the public.
Trustee means a person who holds, controls and manages property or any other interests for the benefit of a beneficiary or beneficiaries or for purposes specified in the document creating the trust Trust law in Tanzania is governed by the Trustees Incorporation Act Cap 318 ; and Trustees Incorporation Rules, 1956.
This Act has been amended from time to time over the years. This article focuses on the recent amendments made in year 2019 and 2020.
A trustee or trustees appointed by a body or association of persons bound together by custom, religion, kinship or nationality, or established for any religious, educational, literary, scientific, social or charitable purpose that own property in trust are supposed to compulsorily register under the Trustees Incorporation Act of Tanzania if there are not registered under any other law.
The list of properties in this context includes (As amended in 2020): land, finance, shares, monies, securities, stock or other property. Once registered, such trustees become a body corporate capable of suing and being sued in the corporate name, would have perpetual succession and a common seal, and can own and dispose of properties.
The law provides that every ‘body corporate’ registered under the Act has to have the words ‘registered trustees’ in their name. Most religious, educational, social and charitable institutions in Tanzania have constitutions that provide for election of trustees in their organisations.
And most of these organisations own various properties in Tanzania. The trustees elected by these organisations are therefore compulsorily registered and incorporated under the Trustees Incorporation Act.
The said registration is carried out by the Registration, Insolvency and Trusteeship Agency (RITA). This article focuses on the recent amendments made on the Trustees Incorporation Act and other laws videThe Written Laws (Miscellaneous Amendments) (No.3) Act, 2019 and (The Written Laws (Miscellaneous Amendments) Act, 2020 that affect Trust Law in Tanzania.
Amendments in 2019: The new amendments vide the Written Laws (Miscellaneous Amendments) (No.3) Act, 2019 amends several laws that affect trust law in Tanzania. Through this amendment laws regulating different entities in Tanzania such as companies, non-governmental Organisations, Societies, trusts, and sport associations have been amended with a major aim to provide clear definitions of each of these respective entities as shown below: (The author has only focused on entities that directly relate to trusts)
a) The amendment to The Non-Governmental Organisation Act that defines “Non-Governmental Organisation” also known by its acronym “NGO’’ and which includes Community Based Organisation (CBO) means a voluntary grouping of individuals or organisations which is non-partisan or non-profit sharing established and operates for the benefit.