Why You Need an Estate Plan in Place
Despite knowing that our time on earth is limited and that we will one day leave the fruits of our labour behind, many people still resist estate planning. In Nigeria, this reluctance often stems from superstition (the fear that planning for death invites it), procrastination, or the belief that estate planning is only for the elderly or the extremely wealthy.
However, estate planning is not about "inviting death." It is about taking control, protecting what you have built, and ensuring peace of mind for those you leave behind. It is time to set aside these reservations and take active steps toward organizing our affairs.
What is an Estate Plan?
An Estate Plan is a strategy for the distribution of your assets and property—either during your lifetime or after you pass on. At its core, it is about anticipating the transfer of wealth and responsibilities to the next generation in a manner that aligns perfectly with your wishes.
Why do you need one?
If you do not have an estate plan, you leave your assets at the mercy of others. Your estate will be subject to the laws of intestacy, which are often complicated and can lead to bitter family disputes or the total loss of your legacy.
Furthermore, an estate plan can guide your survivors in making your burial arrangements. After working so hard to accumulate wealth, it is only fitting that you ensure its efficient transfer. Estate plans are essential tools for consolidating your growing assets and ensuring a relatively effortless transition for your children and loved ones.
"Will an inheritance make my children lazy?"
There is a common perception that "the first generation builds, and the second generation squanders." However, there is no strong evidence that inheritance causes laziness. Success or failure is usually a matter of personality and upbringing; in fact, many descendants do even better than their parents.
A good estate plan does not stop you from enjoying your money while you are alive. Instead, it ensures that when you are gone, your wishes—from burial preferences to property sharing—are followed without confusion or "family wahala."
What are the different types of Estate Plans?
Estate planning is not "one size fits all." Different tools (often called "devices") work for different needs:
- Wills: The most common document.
- Trusts: A highly flexible way to manage wealth across generations.
- Life Insurance: Provides a payout to beneficiaries upon your passing.
- Deeds of Gift: For transferring property while you are still alive.
- Power of Attorney: Giving someone the authority to act on your behalf.
You should consider your family dynamic, health, and the location of your assets when choosing the right fit. It is always wise to seek professional advice from a Trustee or a Solicitor.
Writing a Will: Must I use a Lawyer?
You can draft a Will yourself, especially if your situation is straightforward. However, to ensure the Will is legally valid and to minimize the chances of it being contested in court, it is highly recommended to use a Solicitor or a Trustee.
Key Tips for Wills:
- Safe Custody: To avoid the Will being lost or hidden, keep a copy with a trusted person (lawyer, bank vault, or executor) and lodge the original at the Probate Registry for a small fee.
- Stay Updated: You should update your Will whenever your circumstances change.
- Marriage Note: In Nigeria, if you marry "under the Act" (Registry marriage) after writing a Will, that Will automatically becomes invalid. You must write a new one or update it after marriage.
Choosing your Executors
In your Will, you must name an Executor—someone you trust to carry out your instructions.
They must be of sound mind.
If you appoint a minor, they cannot take up the role until they turn 21.
You can appoint up to four people for the same property.
Your Executor doesn't need to be a legal expert; they can hire professionals to help them. You can also appoint a corporate body (like a Trust Company) as your Executor.
Understanding Trusts as an Estate Planning Device
A Trust is a legal arrangement where:
- The Settlor: The person who creates the trust and provides the assets.
- The Trustee: The professional or person who holds and manages the assets.
- The Beneficiary: The person (or people) who will enjoy the assets.
Trusts are governed by a Trust Deed. They are popular because they are flexible and can last for many generations.
"Are Trusts only for the rich?"
No. You don't have to be a billionaire to set up a Trust. For example:
An expectant mother can set up an Education Trust for her unborn child.
A father can place the family home in a Trust so it can never be sold, ensuring his children always have a home for family gatherings.
Trust vs. Will: Which is better?
It depends on your needs.
Access: A Will only takes effect after death and must go through Probate (a legal process that can be slow), meaning beneficiaries may wait months to access funds. A Trust can take effect immediately and continues smoothly even after death.
Privacy: A Will becomes a public document once it goes through probate. A Trust is private—no one knows the details except the parties involved.
Cost: Which is cheaper?
A Will may seem cheaper to set up initially. However, when you pass on, the government charges Probate Fees and Taxes, which are a percentage of the total value of your estate. A Trust might involve more costs upfront (for transferring titles), but it often saves the estate significant money and stress in the long run.
Estate planning is not about death; it is about responsibility and legacy. By putting a plan in place today, you ensure that your hard work is preserved and your loved ones are taken care of exactly how you intended.
