Authored Similoluwa Esther Ajayi
Afe Babalola University
Introduction
In Nigeria, death is often not the end of legal or administrative burdens. Instead, it typically triggers protracted probate processes, public filings in court, and disputes over asset distribution among family members.[1] Nigeria continues to rely on a will-centric approach to estate planning, despite the general availability of flexible instruments for succession planning across the globe.[2] Although a will is a key instrument in estate planning, it has increasingly become inadequate for the needs of modern wealth holders, family structures, and cross-border assets.[3]
An estate plan needs to move beyond mere distribution after death and embrace lifetime management and continuity of wealth transfer.[4] A private living trust-a form of inter vivos trust-provides an efficient structure for continuous administration of wealth, privacy, and asset protection.[5] This paper argues that while a will is still required under Nigerian law as a supplementary document, a private living trust offers far better operational continuity, confidentiality, and protection of assets, and is a critical tool of modern estate planning in Nigeria.
The Weaknesses of a Will-Centric Estate Planning Framework
Nigerian estate planning, which has historically relied on wills, is fraught with practical weaknesses which often defeat the purpose of estate planning: seamless management and continuation of wealth for family benefit.
First, a will is operative only upon death. Its executors cannot effectively administer estate assets without a grant of probate from the High Court Probate Registry in some Nigerian states.[6] The process of acquiring a grant of probate, especially in these states, often lasts several months or years due to administrative inefficiencies, required financial audits, and court procedures.[7] During the interim period, assets in the estate cannot be utilized by beneficiaries, especially immediate dependents, leading to hardship and liquidity shortages.[8]
Second, wills sacrifice privacy. Once filed for probate, a will becomes a public record and can be inspected by any third party.[9] This exposure of an individual’s financial situation, distribution plan, and family relationships to public scrutiny facilitates spurious claims, predatory suits, and family disagreements.[10]
Third, wills are susceptible to formal challenges. They can be set aside by courts on the grounds of lack of capacity, undue influence, non-compliance with the formality requirements in the relevant state Wills Law, and violation of local customary law principles still applicable in some Nigerian states.[11]
None of these weaknesses make a will an obsolete document. However, they clearly demonstrate why reliance on a post-mortem document is unsuitable for managing modern wealth.
Why Private Living Trusts Are the Superior Alternative
A private living trust (inter vivos trust), by contrast, overcomes the weaknesses inherent in a will. A trust transfers legal ownership of designated assets to a trustee, who holds and manages the assets under a trust deed in strict accordance with the terms stipulated by the settlor.[12]
Continuous Asset Administration and Immediate Access.
Living trusts are established and funded during the settlor’s life. Therefore, at the settlor’s death, trust assets do not technically form part of their personal estate and so bypass probate.[13] Legal ownership vested in the trustee remains with him, so the trust administration and disbursements can continue without a break.
Beneficiaries have ongoing access to funds for maintenance, education and other requirements.[14]
Absolute Confidentiality.
Living trusts are private documents executed between the settlor and the trustee. They need not be filed with public probate authorities upon the death of the settlor.[15] This means privacy is maintained. Sensitive details about family, financial holdings and business succession remain confidential and protected from public view.
Protection of Assets and Management During Incapacity.
An expertly drafted living trust provides mechanisms for lifetime incapacity.[16] If the settlor becomes incapacitated, the nominated trustee takes over the management of assets as per the trust deed without the need for the court to appoint guardians or committees to manage the estate.[17] Additionally, by transferring legal title to the trustee, assets can be shielded from personal claims by future creditors or plaintiffs, provided the transfer occurred when no such claims were anticipated and the trust deed is irrevocable and well drafted[18].
Facilitated Multi-Generational Succession and Business continuity.
Complex or unique assets like shares in family businesses, real estate portfolios, intellectual property and funds can be managed through living trusts. Tailored provisions can dictate how these assets are distributed, or their continued operation under agreed management rules or distribution schemes as beneficiaries attain specific ages or educational milestones.[19]
When is it effective?
Will: Not effective until the death of the creator of the will.
Private Living Trust: The living trust is effective from the moment you complete it and fund the living trust with assets (transfer assets into it)[20].
Probate Needed?
Will: Will required, which means your assets will be put through court delays and administration, probate fees.
Private Living Trust: No probate or court involvement, none at all.[21]
Public Record
Will: Public document after you file a will for probate grant.
Private Living Trust: Private document, confidential.[22]
Management during a period of incapacity
Will: Your will has no effect while you are alive and incapacitated because the will takes effect after your
Private Living Trust: a living trust is the mechanism to manage your assets during your period of incapacity via a successor trustee named.[23]
Roadblocks to Wider Adoption of Living Trusts in Nigeria
While the advantages of living trusts are evident, there are several legal, logistical and cultural challenges that hinder their pervasive use:
Limited Public and Practitioner Understanding: Many Nigerians and even many lawyers consider trusts to be complex, “off-shore” documents exclusively suited for ultra-high net worth individuals, not for straightforward local estate planning.[24]
Costs of Transfer and Taxation: For certain assets like real estate and investments, transferring legal title into a living trust incurs immediate costs (stamp duty, governor’s consent on property, registration fees under Land Use Act).[25] These costs are often higher than the indirect costs incurred through a probate process at the testator’s death.
Trustee Selection and Professional Fiduciary Trust: Placing control of family assets into the hands of trustees-whether professional bodies or individuals-often presents trust issues due to lack of confidence in institutional practices or individuals’ trustworthiness.[26]
Legal Framework and Judicial Familiarity: Nigerian law generally follows English law on trusts with state and federal statutes supporting them. While principles of equity and trusts pervade Nigerian common law, specific judicial precedent on modern private family trusts and their operational issues remains limited compared to a robust body of case law on wills and testaments.[27]
These impediments should be addressed through greater public and professional education, modernised legal structures and state taxation policies, and professional trust management services in Nigeria.
Conclusion
Estate planning in Nigeria needs to focus beyond “What happens after death?” and include the broader issue of “How is wealth structured and managed effectively, throughout life and for generations ahead?”
Though wills will continue to be necessary instruments for certain purposes-such as ensuring there is no intestacy (through residuary provisions, or a “pour-over” will), and appointing guardians for minor children, they can no longer be the sole instruments of substantial wealth preservation.[28] Private living trusts offer the continuity, privacy, and governance necessary for effective management of modern wealth. Adoption of living trusts as the backbone of an estate plan in Nigeria is the way forward for enhanced wealth retention and for protection against unnecessary legal challenges and decay of assets.
List of Reference(S) /Bibliography
Books & Treatise
Chianu E, law of succession in Nigeria, Ambik Press 2007.
DademYY, Property Law Practice in Nigeria, 3rdEd. Jos University Press 2015.
McGovin WM & Kurtz Sheldon F, Wills, Trust and Estates- Including Taxation and Future Interests, 4th Ed. West Academic Publishing 2010.
Nwabueze BO, Nigerian Land Law, Nwamife Publishers 1972.
Ong Dennis SK, Trusts Law in Australia, 4th Ed. Federation Press 2012
Pettit, Philip H., Equity and the Law of Trusts (12th edn, Oxford University Press 2012).
Scott, Austin Wakeman, William Franklin Fratcher, and Mark L. Ascher, Scott and Ascher on Trusts (5th edn, Aspen Publishers 2006).
Smith, I.O., Practical Approach to Law of Real Property in Nigeria (3rd edn, Prnceton Publishing 2013).
Utuama, A.A., Nigerian Law of Real Property (2nd edn, Shaneson C.I. Ltd 2012).
Peer-Review Journal Articles
Aina, K.O., ‘Procedural Bottlenecks in the Probate Registry: Implications for Estate Administration in Nigeria’ (2019) 11(3) Journal of Law, Policy and Globalization 88–97.
Akanki, E.O., ‘The Applicability of the Trustee Act 1893 in Nigerian Jurisdictions’ (2018) 5(1) Journal of Contemporary Legal Issues 33–42.
Amokaye, Oludayo G., ‘Basic Principles of Estate Planning in Common Law Jurisdictions’ (2018) 9(2) Journal of Property Law & Contemporary Issues 114–125.
Antenucci, Joseph M., ‘The Inter Vivos Trust as a Superior Alternative to the Will in Modern Estate Planning’ (2016) 42(1) Ohio Northern University Law Review 135–152.
Ausness, Richard C., ‘Planned Distributions and the Discretionary Trust’ (2014) 49(1) Real Property, Trust and Estate Law Journal 55–82.
English, David, ‘The Uniform Trust Code: Groundbreaking Legislation for the New Millennium’ (2002) 27(2) ACTEC Journal 101–112.
Foster, Frances H., ‘Privacy and Estate Planning in the Information Age’ (2017) 66(3) Florida Law Review 545–568.
Halbach, Edward C. Jr., ‘Significant Trends in the Law of Trusts’ (1998) 32(2) Vanderbilt Journal of Transnational Law 301–320.
Langbein, John H., ‘The Nonproven Revolution and the Future of the Law of Succession’ (1987) 97(1) Harvard Law Review 1108–1121.
Radford, Mary F., ‘Advantages and Pitfalls of Living Trusts in Modern Financial Planning’ (2020) 45(4) Estates, Gifts and Trusts Journal 210–222.
Smith, I.O., ‘Asset Protection and Creditors’ Rights under Inter Vivos Settlements’ (2015) 7(1) Nigerian Journal of Business Law 45–58.
Taiwo, O.A., ‘Awareness and Utilization of Private Trusts among High Net-Worth Individuals in Southwest Nigeria’ (2022) 13(2) Journal of Private and Property Law 101–114.
Uwaifo, N.O., ‘Evolution of Wealth Transmission: Moving Beyond Post-Mortem Transfers in African Jurisdictions’ (2021) 15(1) African Journal of Comparative Law 67–81.
Wright, C.A., ‘Fiduciary Duty and Institutional Trusteeship in Emerging Markets’ (2020) 26(3) Trusts & Trustees 245–256.
Statutes and Rules
Capital Gains Act cap C1, Laws of the Federal Republic of Nigeria, 2004 (as amended).
Finance Act (Nigeria).
High court of Lagos State (Civil Procedure) Rules, 2019.
Land use act 1978 cap L5 laws of the federal republic of Nigeria 2004.
Stamp Duties Act cap S8, Laws of the federal republic of Nigeria 2004.
Trustee Act 1893(UK Statue of General Application).
Wills Act 1837(UK Statue of general Application).
Wills law of Lagos State, cap W2 Laws of Lagos State 2015.
(4) Case Law
Adesubokan v Yinusa [1971] All NLR 227(SC).
Idehen v Idehen [1991] 6 NWLR (Pt 198) 382 (SC).
[1] Emeka Chianu, Law of Succession in Nigeria (Ambik Press 2007) 45–52; see also Y.Y. Dadem, Property Law Practice in Nigeria (3rd edn, Jos University Press 2015) 289
[2] I.O. Smith, Practical Approach to Law of Real Property in Nigeria (3rd edn, Princeton Publishing 2013) 412; Oludayo G. Amokaye, Basic Principles of Estate Planning in Common Law Jurisdictions (2018) 9(2) Journal of Property Law & Contemporary Issues 114, 118
[3] Joseph M. Antenucci, ‘The Inter Vivos Trust as a Superior Alternative to the Will in Modern Estate Planning’ (2016) 42(1) Ohio Northern University Law Review 135, 138
[4] N. O. Uwaifo, ‘Evolution of Wealth Transmission: Moving Beyond Post-Mortem Transfers in African Jurisdictions’ (2021) 15(1) African Journal of Comparative Law 67, 72
[5] John H. Langbein, ‘The Nonproven Revolution and the Future of the Law of Succession’ (1987) 97(1) Harvard Law Review 1108, 1113
[6] Wills Act 1837, s 24; see also Idehen v Idehen [1991] 6 NWLR (Pt 198) 382 (SC) (underscoring that a will speaks from death)
[7] A.A. Utuama, Nigerian Law of Real Property (2nd edn, Shaneson C.I. Ltd 2012) 204; see also B.O. Nwabueze, Nigerian Land Law (Nwamife Publishers 1972) 310
[8] K.O. Aina, ‘Procedural Bottlenecks in the Probate Registry: Implications for Estate Administration in Nigeria’ (2019) 11(3) Journal of Law, Policy and Globalization 88, 92
[9] igh Court of Lagos State (Civil Procedure) Rules 2019, Order 62 (Probate and Administration), Rule 14 (providing for public inspection and caveator entries)
[10] Frances H. Foster, ‘Privacy and Estate Planning in the Information Age’ (2017) 66(3) Florida Law Review 545, 552
[11]See e.g., Wills Law of Lagos State (Cap W2, Laws of Lagos State 2015), s 1(1) (preserving customary law limitations on testamentary capacity); Adesubokan v Yinusa [1971] All NLR 227 (SC)
[12] Philip H. Pettit, Equity and the Law of Trusts (12th edn, Oxford University Press 2012) 15–22; Trustees Act 1893 (Statute of General Application in Nigeria)
[13] Denis S.K. Ong, Trusts Law in Australia (4th edn, Federation Press 2012) 89
[14] Edward C. Halbach Jr., ‘Significant Trends in the Law of Trusts’ (1998) 32(2) Vanderbilt Journal of Transnational Law 301, 308
[15] A.W. Scott, W.F. Fratcher, and M.L. Ascher, Scott and Ascher on Trusts (5th edn, Aspen Publishers 2006) S. 1.4
[16] David English, ‘The Uniform Trust Code: Groundbreaking Legislation for the New Millennium’ (2002) 27(2) ACTEC Journal 101, 105
[17] Mary F. Radford, ‘Advantages and Pitfalls of Living Trusts in Modern Financial Planning’ (2020) 45(4) Estates, Gifts and Trusts Journal 210, 215
[18] See Capital Gains Tax Act 2004 (as amended), s 8; I.O. Smith, ‘Asset Protection and Creditors’ Rights under Inter Vivos Settlements’ (2015) 7(1) Nigerian Journal of Business Law 45, 49
[19] Richard C. Ausness, ‘Planned Distributions and the Discretionary Trust’ (2014) 49(1) Real Property, Trust and Estate Law Journal 55, 61
[20] Halbach Jr. (n 14) 308
[21] Utuama (n 7) 204
[22] High Court of Lagos State (Civil Procedure) Rules 2019, Order 62, Rule 14
[23] Radford (n 17) 215
[24] O. A. Taiwo, ‘Awareness and Utilization of Private Trusts among High Net-Worth Individuals in Southwest Nigeria’ (2022) 13(2) Journal of Private and Property Law 101, 106
[25] Land Use Act 1978, Cap L5 LFN 2004, s 22 (requiring Governor’s consent for alienation); Stamp Duties Act, Cap S8 LFN 2004 (as amended by Finance Acts)
[26] C.A. Wright, ‘Fiduciary Duty and Institutional Trusteeship in Emerging Markets’ (2020) 26(3) Trusts & Trustees 245, 250
[27] E. O. Akanki, ‘The Applicability of the Trustee Act 1893 in Nigerian Jurisdictions’ (2018) 5(1) Journal of Contemporary Legal Issues 33, 38
[28] W. M. McGovern and S. F. Kurtz, Wills, Trusts and Estates: Including Taxation and Future Interests (4th edn, West Academic Publishing 2010) 312
