490 views | Chinemerem Nnawuihe | July 20, 2020
There are two important vehicles used in bequeathing estates namely, a Trust and a Will.
In Nigeria, it is common to use Wills for this purpose. Trust even though a part of our legal system has remained at its infancy. The reason is not because of its inadequacy in catering for the asset management and distribution needs of corporate entities and individuals but largely because of ignorance and lack of information on the subject.
A will and a Trust can co-exist for the purpose of assets management and distribution.
However, it is my humble opinion that a Trust is the best vehicle to be used for the management and distribution of assets.
A Trust is very important where a person has accumulated assets both liquid and physical and has a family to cater for.
The view of some experts is that, a Trust should be created only where there are complexities and tax issues involved in the assets of a person; otherwise, a Will is most suitable for the distribution of assets. While for other experts, they hold the unequivocal view that, Trust is the best vehicle for the management and distribution of assets.
It is advisable to get as much information as possible before setting up/creating a Trust. The key information is the cost for the establishment and management of a Trust and if its actually necessary to create a Trust to take care of the needs of an individual.
Unlike a Will which comes into force after the death of the testator. A Trust can take effect during the lifetime of an individual. An example is a Trust inter vivos. The advantage is that, during a person’s lifetime he can appoint trustees to hold, manage and distribute assets according to his/her wish. The keyword is CONTROL.
While setting up a Trust, it is always advisable to use professionals and experts who will do a proper assessment of your financial status in order to create a Trust that will meet your needs.
Further on this subject, I had an interaction with some Trustees and I got the following information:
These investments are usually on a long term basis and the above areas of investment are considered as low risk, high-risk areas are totally avoided.
Cost of creating a Trust
A Trust is the absolute choice when choosing the best means to manage and distribute your assets. However, experts must be used in doing this in order to get the best result(s) because a Trust, is as good as the professional who sets it up.