A will is the central estate planning document, but it does not reach every asset. Life insurance policies and retirement benefits are commonly paid to a nominated beneficiary under the policy or the scheme, so the nomination can decide who receives the money. That makes nominations part of estate planning, not an administrative detail completed at induction and forgotten. The point is not to replace the will but to make the will and the nominations tell the same story.
Why nominated benefits may sit outside the will
Life insurance proceeds are commonly paid to the person nominated under the policy, subject to the policy terms and the insurer’s requirements. Retirement benefits are paid under the rules of the scheme and the member’s nomination, and the Retirement Benefits Act and the scheme rules govern how the benefit is dealt with. These arrangements often operate outside the will and outside the probate process under the Law of Succession Act (Cap 160). The precise position depends on the product, the scheme rules and the nomination itself.
Because the benefit may not pass under the will, a will that leaves everything equally among children does not necessarily equalise insurance and pension benefits. A nomination naming one child, or a former spouse, can produce a result the will never intended. The family may only discover the mismatch after death, when the insurer or trustee will usually look to the document on file.
Where nominations commonly fail
- A nomination made at induction and never reviewed after marriage, divorce, separation or the birth of children.
- A form naming a parent, sibling or former spouse who is no longer the intended beneficiary.
- Minor children named without a trustee, guardian or scheme arrangement to receive and manage the money.
- Several policies or schemes, with no single record of what exists or where the documents are held.
- Inconsistency between the nomination and the will, or between different nomination forms.
- A nomination that is unsigned, undated, witnessed incorrectly or lost by the insurer or scheme.
- A benefit that is never claimed because the family did not know the policy or scheme existed.
These problems are ordinary rather than exceptional. They are also difficult to fix after death, when memories differ and the paper record may be incomplete.
Align the nomination with the will and the family
Review the will, the policy documents and the scheme nomination together. Decide who should receive each benefit and why. Where the intention is equality, check that the nomination produces equality after all benefits are counted. Where a particular asset is meant for a particular person, say so consistently in the will and the nomination. Do not assume that one document corrects the other.
Keep a schedule of policies, schemes, policy numbers, insurers or trustees, nomination dates and the location of the original documents. Give a copy to the executor or a trusted family member, or record its location in the will. A schedule is not a substitute for a valid nomination, but it prevents benefits from being forgotten and helps an executor identify what exists.
What to check, by document
| Document | Who controls payment | What to check |
|---|---|---|
| Life insurance policy | Insurer, under the policy and nomination | Current form, correct names, shares, trustee for minors, policy status and premiums |
| Group life policy | Insurer and employer scheme | Whether the nomination sits with the insurer or employer, and what happens on leaving employment |
| Pension or provident scheme | Trustees, under the scheme rules and nomination | Latest nomination, the death benefit rule, dependants and any trustee discretion |
| Will | Executor, through probate | Consistency with nominations, guardian for minors and a residue clause that picks up undistributed assets |
| Trust | Trustees | Funding, powers, who may receive and when, and the tax and succession consequences |
Confirm each answer with the insurer, employer or scheme trustee in writing. Front-line staff may not know the death benefit rule, and a verbal answer is difficult to rely on later.
Minors, dependants and vulnerable beneficiaries
A nomination to a minor raises a practical question: who receives and manages the money? Some schemes pay a trustee or guardian; others pay into an account. A trust can set out who manages the funds, what they may be used for and when the beneficiary receives them. The right structure depends on the amount, the family and the scheme rules.
Where a beneficiary has a disability, creditors or a history of financial difficulty, a trust or a scheme arrangement may be more suitable than an outright payment. Take advice on the tax and succession consequences before changing a nomination. A nomination that is emotionally right but administratively unworkable can create a dispute among the very people the member wanted to protect.
Review the plan at defined moments
Review nominations after marriage, divorce, the birth or adoption of a child, the death of a beneficiary, a change of employer, retirement, the sale of a business or a significant change in assets. Diarise a review every few years even if nothing seems to have changed. Obtain written confirmation from the insurer or scheme that the new nomination has been recorded.
Do not rely on an old copy of a form. If a nomination cannot be found, ask for the record on file. If a scheme is wound up or an employer changes provider, confirm what happens to the nomination and whether members must complete a new form.
The will and the nominations should be reviewed by the same person at the same time where possible. An adviser who sees only the will cannot tell whether the insurance and pension benefits will produce the intended result.
Primary sources
- Law of Succession Act (Cap 160), Kenya Law.
- Retirement Benefits Act (Cap 197), Kenya Law.
- Retirement Benefits Authority, for scheme guidance and member information.
- Insurance Act (Cap 487) and the Insurance Regulatory Authority, for life insurance and insurer conduct.
- Kenya Law, for the current text of these statutes and subsidiary legislation.
This article is general information, not legal advice.
