Author: ARM

Hello Shade,

I read your previous article in response to a lady’s question regarding her intended husband’s will. I found it admirable that her intended husband had gotten a will so early in his life. I trust God for protection and long life, but I have started considering getting a will too. Especially because of the occupational hazard I am exposed to, working on the high seas. Although we have been married for almost 10 years, my wife and I have no biological children, but we have two adopted children who will definitely be catered to in my will. However, I am certain that we are going to have children of our own very soon. Do I have to wait till my children arrive before including them in my will? Is it possible or commonplace to make provision for unborn children and grandchildren?

Sylvester, from Port Harcourt

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Hello Sylvester,
Thank you for reading my previous post. I am glad that our opinions concerning that matter are aligned. I must also commend your admirable decision to adopt children while waiting for your biological offspring.

Considering having a will is a good step to take, particularly as you are constantly exposed to occupational hazards. You are absolutely right, getting a will does not negate our trust in God’s protection, it only helps us prepare for that which is inevitable. The thought of passing away and its eventual consequences to loved ones who are left behind is enough to necessitate getting a will. As a matter of fact, everyone should consider getting a will as no one knows just how much time they have.

Children are usually the worst hit when one or both or their parents pass on, hence providing for them is indeed a necessity. Although the Child’s Right Act has already highlighted the rights of children irrespective of whether they are unborn or adopted, you can also make provision for your unborn children as a separate class of beneficiaries in your will. It is not unusual to provide for such beneficiaries using
suitable and flexible estate planning tools.

I am glad that you are considering getting a will as soon as possible. I would encourage you to act without delay.

Thanks to everyone who has reached out to me with their concerns. If you would like to have your question featured, please email [email protected]

Yours truly,
Shade

Hello Shade,

Please help me. My grandfather left my brother and I property in our home town. Although we were young when his Will was read, my grandmother lived much longer, and she took us to see the property. Now that we are old enough to use the property, we discovered one of my uncles has since occupied it. All attempts by my dad and other uncles to reason with him have been futile. Since there was a Will, there must be something we can do. How can we reclaim the property? My brother and I intend to start a farm there.

Bode, Ibadan

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Dear Bode,
You are quite fortunate to have had a grandfather who cared for you enough to leave you something substantial. And your desire to invest in agriculture is also very admirable. Consider this situation a little hurdle on your way to achieving your dreams.

According to your story, your grandfather had written a Will leaving you and your brother his property. Whenever an individual writes a Will, one of the most important questions one must ask is, “who would be responsible and trustworthy enough to carry out my wishes when I pass?”. The individuals appointed to carry out these wishes are called the “Executors” to the Will.

Once a person dies and his Will has been read, the Executors must file for a probate grant at the probate court. Probate refers to the legal process of validating a Will. Once the grant is received, this unlocks the assets and distribution can commence. Because the executors have several responsibilities and can be held personally responsible if they are not properly carried out, it is important to carefully consider appointing executors who are trustworthy and capable of carrying out the sometimes-complicated processes.

Surely, your grandfather appointed executors to his Will. Some questions may likely arise:
1. Are the executors still living?
2. Did they carry out and successfully complete the probate process?
If the answers to the above questions are positive, the first step to reclaiming your rightful property would be to urge the executors to effectively discharge their responsibilities to your grandfather by executing a vesting assent, a document in which the transfer of title to you and your brother would be effected and documented. You may then proceed to register the vesting assent at the land’s registry in the State where the property is located as proof of your title to the land. Once you hold title, you may subsequently evict your uncle from the property by a suit at the court of law.

I would however, counsel that prior to effecting an eviction, please try to use all non-formal means possible for reaching an amicable resolution for your uncle to vacate the property. This may ensure that relationships amongst your family members remains warm and cordial.

My best wishes to you and your brother as you start your farm.

Hello Shade,
My parents left me a huge inheritance when they passed away last year. I am just 22 and I don’t think I have enough experience and know-how to manage that kind of money yet. I want to take a few years to further my education and pursue my passion. How can I secure my inheritance while I’m away?
Bola, Lagos
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Hello Bola,
I commiserate with you on the passing away of your parents. Your ability to pick yourself up and address issues from a rational perspective despite your loss is commendable, as is your desire to further your education regardless of your buoyant financial status.

While it is great that you have chosen to pursue a future of your own, it is important that you appreciate your parents’ sacrifice and kind gesture in leaving you an inheritance. This gesture confers a huge responsibility on you, bordering on the preservation, judicious use and growth of the assets that now belong to you.

For instance, if your inheritance includes functional organisations or property that require maintenance, the responsibility now rests squarely on your shoulders. You would have to keep an eye on operations, ensure the business continues to run, salaries are paid as and when due, maintenance policies are put in place among many other necessities. If your inheritance is liquid as well, the wise thing to do is to ensure it keeps growing via profitable investments and proper handling.

However, it will be extremely difficult, if not impossible to do all of these while you are away studying and charting your own path in life. In order to guarantee the preservation and growth of your inheritance without interfering with your plans and activities, you should seriously consider setting up a Trust.

A Trust can be defined as any arrangement whereby assets (such as your inheritance) are transferred by you as a Settlor (creator of the Trust) into a Trust with the intention that the Trust is to be administered by the Trustee for your benefit and the benefit of any other persons or entities that you so choose.

A corporate trustee (such as ARM Trustees) would have the capacity and experience to manage your inherited assets whilst you focus on your education and pursue your passion. A part of the income on those assets or a portion thereof would be transferred to you periodically until you complete your education or until any stated future time. The Trustee would provide you with periodic reports on the management of your assets and may also take instructions on the management of the assets from you, where necessary.

You may choose to make the Trust a Revocable Trust so that when you believe that you are ready to fully manage your inheritance, the Trust may be terminated and the Assets would be transferred back to you.

Should you require further information and guidance about how to set up a Trust or Investment opportunities to consider for the preservation of your assets, please write to me. I will be glad to help.

Hello Shade,
I need your help. My wife and I have worked hard building our business with hopes that our son would one day join the business and eventually own it when we are retired. We sent him to a business school abroad only for him to return with a photography degree. He is our only child but he is not interested in the business we have built and all our plans for him. If he insists on not joining the business, how can we keep the business alive after we are retired or even gone?
Kenneth, Abuja
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Hello Kenneth,

I empathise with you regarding the actions of your son. Many parents are increasingly surprised that their children would rather pursue alternative careers other than the ones they desired for them. In many cases however, such children have gone ahead to excel in their chosen careers. Although as parents, we hope that our children follow our directives, we sometimes have to lend our support if they choose to pursue their dreams instead, hoping for the best. While it is yet possible that your son eventually returns to the family business, the best approach to take at this juncture is one that favours both the business and your son.

To ensure that your business survives and continues to run into the foreseeable future, I would recommend that you create a Trust and transfer your shares or other ownership interests in your business to the Trust. The Trustee as owners of the business would run the business by appointing and overseeing the management of your business in the event that you and your wife are retired, become infirm or pass away. You may retain control of your business through the Trustee while you are alive. The income generated by the business would be held by the Trust on your behalf and for the benefit of anyone you may nominate as beneficiary.

You may name your son as a beneficiary and specify that the Trustee may provide for the welfare of your son (or grandchildren) in the Trust. In order to make your son more responsible, you may include “Spendthrift” provisions in the Trust. A Spendthrift provision may state, for example that unless your son is in formal employment, reaches a certain age or has an alternative and verifiable legal source of income, he would not take benefit of the funds or assets in the Trust. Should your son eventually choose to honour your wishes and return to the business, you may make provision for him to do so as well.

I believe this may be in the interest of your child as well as preserve the business. In the words of Warren Buffet, one should leave children with ”enough money so that they would feel they could do anything, but not so much that they could do nothing.” You may also designate alternative persons or entities such as charitable organisations to benefit from the Trust in the event that the assets do not pass on to your son or grandchildren.

I have a house, me and my husband are living in currently. It was given to me by my father and I managed to convince my husband that we should live here in town rather than a far place from both our work. I lied to my husband that it was a gift from my dad to the both of us, but it’s just my name there. I did this because he was refusing to stay in the house. He wanted us to rent a house far away and there was no point wasting money on rent and petrol (for travel to and from work, plus it would be so stressful going to and from work as we only had one car at the time) Should I put the house in a trust for my future kids?’ – StaciB

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Hi StaciB,

You can and should set up a Trust transferring the ownership of the house to the Trust for the specific purpose of later transferring the house to your future children.

A Trust can be defined as any arrangement whereby assets (such as your house) are transferred by a Settlor (creator of the Trust) into a Trust with the intention that the Trust is to be administered by the Trustee for the benefit of others (which in this case would likely comprise you as Settlor in your lifetime, and your children as beneficiaries after your demise).

In creating a Trust, it is imperative that the proposed Trust assets are legally transferred to the Trustee and effectively such assets are thereafter considered trust assets. The trust assets do not form part of the trustee’s own proprietary assets. The Trust Creation document which is known as the Trust Deed would have specified your objectives of transferring the house to your children in future.

The advantage of having a Trust is that you would no longer be reflected as the legal owner of the property. The confidentiality of a Trust also means that it is unlikely that any other person would know about the Trust or its purpose. The Trustee which would hold the house for the benefit of your children is duty bound to transfer the house to your children in accordance with your instructions. The Trust may also be structured to be quite flexible such that you may also be able to transfer or sell the house through the Trust if you decide not to proceed with the transfer to your future children. The drawback of a Trust is that there might be expenses relating to the initial transfer of title to the Trustee and the Trustee would also earn recurrent fees for holding or managing the Assets.

The specific type of Trust that would suit your objective is a Single Asset Trust. The Trust Creation document which is known as the Trust Deed would have specified your objectives of transferring the house to your children in future. The Trust Deed may also state if the Trust is revocable (which means you may terminate the Trust) or not and also specify the powers of the Trustee in relation to the house.

To ‘protect’ your marriage, you can choose to carry your husband along in the Trust process. Perhaps discuss the advantages of securing the house for your children with him and get his buy-in on your decision to set up a Trust or even jointly set up the Trust. That way, he would not wrongly assume that he shares in the ownership of the house and your marriage will be secure in the knowledge that the house ultimately belongs to your children.

In the process of setting up your Trust, you will be further advised by Trust Experts with respect to costs and process for transferring the property to the Trust.

Hi Shade,
My name is Gloria, I got married 5 years ago at 35. Before the wedding, I already built a house at Mowe, a block of 6 flats, and I have other undeveloped property that I didn’t tell my husband about (so as not to intimidate or repel him). My plan is to gift the property to my children as a start-up fund the moment they are done with university. Do I have to declare these assets to my husband? If anything happens to me along the way, how can I ensure my children get these assets? The properties were bought in my name.
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Hi Gloria,
It is quite commendable that you were resourceful enough to invest in assets as a young woman; even more commendable that you are planning towards a secure future for your children.

One of the best ways to secure your property is to set up a Trust, naming your children as beneficiaries. A Trust is a legal relationship amongst 3 parties – the Settlor, the Trustee and the Beneficiaries. The Settlor being the original creator of the Trust, the Trustee the ‘holder’ of the assets transferred to the Trust and the Beneficiary or Beneficiaries the party or parties for whose benefit the Trust has been established. Trusts are very confidential in nature and as such make it possible for you to achieve your objectives privately.

You can set up a Trust and transfer these assets to the Trust. The assets will be held in the name of your Trust/Trustee and in due course, income generated from these assets can be given to your children to start up their own businesses. Alternatively, at a designated time, your Trust may sell such real estate asset and give proceeds to your children as seed investment for their businesses. You can guide your Trustees, even in absentia through a Letter of Wishes. Putting the assets in a trust today offers the protection you require for the assets because such assets will be legally independent of you.

As you are still young and active, I would recommend that you set up a Trust that still leaves the role of management of your assets and investment decisions to you.

To “protect” your marriage, you may choose to set up a joint Trust with your husband or name his as a beneficiary under the Trust with instructions on what exactly you wish to give to him and when. It is not necessary for beneficiaries to know about the Trust.