How the wealthy avert vicious property feuds
From left: Mwai Kibaki, Charles Njonjo, Naushad Merali and Chris Kirubi
Business mogul Naushad Merali decreed anyone disputing his Will would get $1 (Sh145) from his vast estate.
Tycoon Chris Kirubi first wrote his Will aged 55 years so his decisions won’t be contested on age. He died at 80.
Retired President Mwai Kibaki and former Attorney-General Charles Njonjo declared that children-in-law were not beneficiaries. This is designed to restrict the number of beneficiaries to the close-knit family, and potentially limit conflict.
These are the measures the wealthy and prominent Kenyans have resorted to in a bid to avert fighting over their billion-shilling empires in death.
Worry about succession — and the threat to family businesses — is among the concerns for Kenyan billionaires, according to the latest Knight Frank Wealth Report 2022.
The transfer of wealth to the next generation is a key moment of vulnerability for these tycoons as poorly managed successions can lead to rapid wealth depletion, observes the report, citing the frequent disputes in Kenya.
This explains the keen attention to succession by these tycoons who are among the few prominent individuals whose families did not implode in a scramble for property following their departures.
Heirs of wealthy and eminent persons such as politicians, businessmen and top civil servants are known for court battles following the death of the patriarchs, and matriarchs, in some instances, but these are among the few families that avoided property feuds.
A review of successful cases in court involving prominent persons show apart from the disputes over division of the wealth, the feuds are also being fuelled by “outsiders” and children born out of wedlock claiming a stake in the estates.
Multibillion-shilling estate
For instance, the beneficiaries and dependants of the late President Kibaki are yet to receive their share of the multibillion-shilling estate not because of wrangles within the family but a dispute lodged by two people claiming to have been sired by him. They want recognition and a share of the wealth. He died on April 22, last year, aged 90.
Major fallouts in wealth succession involve identification of the dependants of the departed person and their entitlements, beneficiaries of the estate and validity of the Will, if any.
“At the succession court, it is all about dividing the properties of the departed to his/her dependants and beneficiaries. The first duty of the court is to identify the beneficiaries and net estate available for distribution. Dispute starts on identification of the beneficiaries,” explains lawyer Adrian Kamotho Njenga.
It is at the point of identifying beneficiaries that claims such as one or some children were not biologically sired by the property owner emerge. For widows, questions on legality of their marriage to the dead man crop up. Former wives also emerge claiming a share of the estate.
Among the big shots whose estates were not marked by disputes is Mr Merali, who died in July 2021, Mr Kirubi in June 2021 and Mr Njonjo, who died in January, last year.
Others are former first lady Lucy Kibaki (died in April 2016), 2004 Nobel Peace Laureate Wangari Maathai (died September 2011), former vice president George Saitoti (died June 2012), former Interior Cabinet Secretary Joseph Nkaissery (died July 2017) and former Chief Justice Evans Gicheru (died December 2020).
A peak into their Wills offers strategies being used to forestall conflict.
Apart from using Wills to avert fallouts, the tycoons exclude spouses of their children as beneficiaries of their estates, hence preventing them from inheriting them directly or claiming direct stake.
Former President Kibaki and Mr Njonjo are among those who declared in their respective Wills that their children-in-laws were not their dependants.
Mr Njonjo bequeathed his wealth — Sh318 million is disclosed in court papers but he is estimated to be worth much more — to his wife and three children.
His estate comprised property in Nairobi, Naivasha, Kiambu, Murang’a and shares at Safaricom, Oceanic Hotel Limited, Mua Insurance and Tarabete Farmers Association. He also had motor vehicles.
Like former President Kibaki, Mr Njonjo declared that the children-in-law were not his dependants.
For Kibaki, he did not disclose his net worth but said he had bequeathed his wealth to his children Judith Wanjiku Kibaki, James Mark Kibaki, David Kagai Kibaki and Anthony Andrew Githinji Kibaki.
He wished that the cash in bank accounts under his sole name be distributed equally and absolutely between the children.
Many fights
But two other persons, Jacob Ocholla and a woman codenamed JNL, emerged claiming to be his children and demanding a stake of the wealth. Their case is yet to be determined.
“Succession can be very controversial because it is open to so many fights by many people and it recognises many people within the family arrangement including parents,” says Mr Njenga.
For instance, interpretation of dependants as per the law of succession is broad. It says dependant can mean a wife or wives in polygamous arrangement, former wife/wives, children of the deceased and it does not matter whether they were maintained by the deceased at the time of his death or not.
Another tactic being used by tycoons to avoid feuds is writing their wishes when they are healthy, with stable memory and can make sound decisions without influence or being under duress.
For instance, Mr Kirubi wrote his first Will on April 19, 1996 in which he bequeathed his children 80 per cent of the estate and siblings 20 per cent.
The billionaire died in June 2021, aged 80, leaving an expansive estate estimated to be worth Sh20 billion. Her daughter, Mary-Anne Musangi, is among those running his empire that includes business investments in transport, banking, insurance, farm and pharmaceutical chemicals, and media.
Persons challenging validity of the Wills usually contend that the owner (testator) made it when he/she was suffering from dementia or did not have stable mental capacity. Others claim that the Will was procured as a result of undue pressure from some dependants.
According to Mr Njenga, other common grounds for contesting a Will include claims that it was procured by undue influence, fraud, mistake or manipulation. The testator putting a signature that is different from his/her other known signatures can be a ground of disputing validity of the Will.
Having a well-structured Will that meets all requirements of the Law of Succession Act such as signature of the testator and two competent witnesses is another reason that has saved some families from court battles.
To avert fallouts in distribution of their wealth, most of the country’s big shots whose wealth has not been subject to court tussles left behind Wills with specific details and particulars on how the assets were to be distributed.
However, according to the lawyer, having a Will is not guarantee that the surviving members of the family will divide the assets based on the final wishes of the owner.
There are instances the Wills get contested and voided by court however valid they may appear, he says.
For instance, if the Will failed to adequately provide for the children of the property owner (testator) that are under the age of 18 years.
Mr Njenga adds that the court also considers whether there are dependants who previously relied on the testator during his/her life and are not reasonably provided for under the Will.
Process of succession
“Once the property owner dies the contest begins on proving the Will in the court's probate process. One may be having a good Will but it is contested for various reasons such as the properties listed. Some people list properties sold or gifted earlier. Having a Will does not mean the process of succession is insulated from disputes,” says Mr Njenga.
To discourage fights over his vast property, Mr Merali, whose wealth was estimated at Sh35 billion, stated in his Will that anyone who challenged his wishes would get one United States Dollar (US$1.00) from the disclosed Sh500 million estate. The estate comprises assets within and outside the country.
According to Mr Njenga, when a Will is contested, the estate cannot be distributed until court determines the issues raised by the objector.
This delays division of the assets and there are instances where estates have remained locked for over 10 years due to the family wrangles.
A case in point is the estate of former Starehe MP Gerishon Kirima, who died in 2010 and his estate is yet to be distributed owing to a long running family feud which stemmed from a contest on validity of his Will.
The lawyer says placing a condition (like Mr Merali) in the Will to shield family from succession disputes may also be unhelpful if the said condition is not clear.
“Putting a provision that whoever disputes the wishes of the testator be given a particular share or be denied or any other condition, sometimes can make the Will uncertain. The intention of the condition must be clear and any condition must be interpreted contextually,” says Mr Njenga. “Any doubt or uncertainty would lead to a conclusion that the person died without a Will (intestate),” he adds.
Former first lady Lucy Kibaki’s Sh200 million estate devolved to her spouse, former President Kibaki, and his three children smoothly.
It comprised shares in companies such as Barclays Bank Kenya Limited, properties in Nyali, Mombasa, and money in banks. The letters of estate administration were issued to Mr Kibaki and his children Judith Wanjiru, David Kagai and Anthony Githinji.
For the 2004 Nobel Peace Laureate Wangari Maathai, her wealth devolved to her three children Waweru Maathai, Muta Maathai and Wanjira Maathai as per the Will dated May 18, 2006.
She had wealth worth $102,402. She had shares in various companies such as American-based lender, Merrill Lynch, Standard Chartered Bank and East African Cables.
She also had motor vehicles, money in banks and over 10 pieces of land scattered in various parts of the country, including Nairobi.
Social relationship
In some cases, the fight is between logic and the law.
If you are identified as a child of the departed property owner, it does not matter when you met him/her last or the social relationship.
There are siblings who attempt to lock out others on various grounds such as social relationship with the father or mother and failure to take care of him/her.
“Upon death, entitlement goes to the dependant or beneficiary by operation of the law that you are his/her child. It does not matter whether he/she was maintaining you or not and that brings you in to the arm of a possible beneficiary. Estranged wives also emerge and are legally entitled. Some families try to lock out the former wives on a belief that they are not entitled to any share of the estate,” says Mr Njenga.
Among the departed tycoons whose Wills have been contested in court is businessmen Nginyo Kariuki, Njenga Karume, Tarlochan Singh Rai, former powerful Internal Security minister John Michuki, former Starehe MP Gerishon Kirima and celebrated entertainer and marketing guru Kevin John Ombajo alias Big Kev.
For former President Moi, who died in 2019 leaving wealth estimated to be worth Sh300 billion, distribution of his estate is marred by a dispute although he had a Will.
Tomorrow: The fightback by children born out of wedlock in scramble for family property
