Tuesday, September 6, 2016 4.44PM / Meristem Trustees
Mr. Akanmu is the Chairman of ZedOil, a company that specializes in downstream oil and gas services. He has companies in other sectors such as the Agric sector (ZedFarms), and in the automobile sector (ZedAutos). In the last valuation report documented in August 2015, his net worth was N1.4 Bn.
Mr. Akanmu recently celebrated his 50th birthday. It was a very lavish and elaborate party with everyone who was anybody in the city of Kokomaiko in attendance. After the party, he had a lengthy chat with his longtime friend Ayo. Ayo brought him to the reality that a proper succession plan as regards his assets was absent. Ayo boasted of having a proper estate plan that currently manages his assets and would further ensure a seamless transfer of his assets to his choice beneficiaries. The chat left the wealthy celebrant feeling very sad and worried. Mr. Akanmu muttered to himself. “What would happen to my business and wealth when I die? My kids are not even mature to take charge of my affairs and less reliable friends out there. I have worked so hard to get to this level, what will happen to my legacy? How can I ensure a successful and seamless transfer of my business and wealth to my next generation (my children) without unending litigations and confusion that usually occurs within family members after my demise? He soliloquized… This task, to Mr. Akanmu is a daunting one, particularly since he has five children (a boy and four girls), several relations who depend on favors from him and assets scattered across Nigeria.
As a loving and dedicated father, Mr. Akanmu does not want to jeopardize the future of any of his children. Mr. Akanmu has considered writing a will at different points in his life journey, but the very thought of all he has labored not getting to the right hands, either because of family relatives contesting his will or for some unforeseen issues that arise when he is no more, has left him unsettled. In addition, Mr. Akanmu is not so sure that his last born (the only boy) will have the ability to manage the asset passed on to him at his early age (since he is just entering college). Also, he is skeptical that the society may not accept the fortune bequeathed to his daughters.
Given the structure of Mr. Akanmu’s family and his innate desire to preserve his legacy after his demise, there are various accepted vehicles of estate planning that will ensure that his dreams of preserving his legacy are achieved. Amongst such vehicles include a Will, a Testamentary Trust and a Living Trust.
A Will is usually the first point of call in Estate Planning. A Will sets out the instructions on how the assets of a person is distributed upon his demise. A major disadvantage of a Will is that it can be contested and must go through Probate before beneficiaries can have access to the assets.
A Living Trust is a relationship whereby an individual’s properties (including real, tangible and intangible) are being managed by one person for the benefit of another. Unlike a Will, a Living Trust is set up and made functional during the lifetime of the individual and the rights of the beneficiaries are guaranteed based on the Trust Deed (the legal document).
Finally, a Testamentary Trust is usually created through a Will and takes effect upon an individual’s demise. This is in contrast with a Living Trust which takes effect during the lifetime of an individual.
A Will may be effective for Mr. Akanmu. However, this is subject to contest from his relatives, customary traditions that require certain members to be beneficiaries and the length of time involved before Probate is granted.
A Living Trust on the hand, transfers the assets of Mr. Akanmu to a Trust on behalf of his beneficiaries which will take effect during his lifetime.
Armed with knowledge and a reliable partner – Meristem Trustees; Mr. Akanmu can explore any of the above options having weighed each critically vis-à-vis his unique circumstances. All he needs to do is to face his fears and be willing to confront the situation with an open mind.
For more insight, kindly contact Meristem Trustees Limited, 3 Norman Williams Street Ikoyi, Ikoyi, Lagos. TEL: 01 4488260, +2347080736754; E-MAIL - firstname.lastname@example.org WEB - www.meristemtrustees.com