Nigeria: Navigating The Contractual Roadblocks To Estate Planning

Last Updated: 4 February 2019
Article by Private Client Group

People tend to measure their success by the milestones they attain during their lifetimes. The usual markers are: levels of wealth, power, and influence. However, over time, most who amass some measure of wealth and success, undergo a shift in focus. They become more concerned with leaving something behind that endures long after they are gone. In other words, in the natural order of things, most will someday ponder on their legacy. This desire to leave something tangible behind in some well thought out and organized form, creates the need for appropriate estate planning.

Estate planning involves preparation for the transfer of assets from someone who owns the assets (a grantor) to the intended "inheritors" or beneficiaries (grantees). Such transfers most commonly take place through Wills and Trusts. Whilst most grantors rest in the assurance that their legacy will be given effect exactly as planned, in reality numerous agreements which they have entered into during their lifetimes often diminish the likelihood that they will have their posthumous wishes realized.

Many potential grantors don't realize that the contracts they enter during their lifetimes, could place restrictions on their ability to transfer their assets when they are gone. The legal principle that sums up the predicament of many a grantor, is that you cannot give what you don't have. This may appear commonsensical, but if not appropriately taken into consideration, its effects are multifold. Firstly, the grantor cannot have his/her wishes followed to the letter. Secondly, it makes the grantor's transferable assets uncertain and vulnerable to misappropriation.

The challenges to intentional and successful estate planning can be surmounted by coordinating your estate/wealth management plan with a review of all relevant contracts entered during your lifetime. This can only be accomplished by engaging a sound legal practitioner who has experience in company law, real estate practice, banking law, and even family law. This is because many agreements entered in these areas have clauses limiting or regulating the asset owner's ability to dispose of or transfer his/her assets. Individuals interested in preparing a well-thought-out estate plan must avert their lawyer's mind to any such agreements that may affect their ability to transfer their assets to intended beneficiaries.

A few estate planning tools are commonly used in estate planning, with each tool presenting its own unique advantages and challenges. For instance, one could set up a company for the sole purpose of acquiring assets or some other singular objective not associated with actual commercial enterprise. This is perfectly legal and referred to a special purpose vehicle, or "SPV". An SPV can acquire/hold assets on behalf of a real person for tax, control, and other regulatory reasons. SPVs are commonly used by high and average net worth individuals as proxies for purchasing assets discreetly. However, SPVs can be limited by the terms creating them as well as by company law. What this means is that SPVs though very useful, are not fool proof, and some 'standard' company agreements entered into may actually undermine their usefulness. To avoid this, the grantor's lawyer must have access to both the estate planning instrument, and all the SPV's corporate documents and agreements.

Another frequently deployed tool of estate planning is the 'trust' mechanism. A trust is an arrangement where one person is appointed to hold property, on behalf of another or others. The trustee cannot use the property for his personal enjoyment, and neither does the person who has appointed him. Assets given to a trustee to hold and manage no longer forms part of the testator's estate and as such care must be taken not to include those assets when planning to dispose of assets via a Will or other estate planning mediums.

When two or more persons co-own a property, that is known as joint ownership. This kind of arrangement is common between husband and wife. As part of a joint succession plan, joint ownership could reduce tax liability, attorneys' fees, etc. What many people fail to realize is that generally, joint ownerships comes with right of survivorship. This means that when one of the joint owner dies, the property does not become part of the deceased's estate; rather, the other owner continues to own the property, with the last surviving owner becoming the full owner. So, if the intention is for 'Mr. & Mrs.' for example, to retain the power to pass on their own share of property to a beneficiary of their choice when they are gone (rather than the surviving partner taking all), they should consider creating an arrangement where each party has distinct ownership of their own share of the property with no right of survivorship. This arrangement is legally known as tenancy in common.

Finally, many 'routine' financial agreements such as those associated with some pension accounts, insurance policies, and other receivable agreements already stipulate what should occur upon the demise of a person. Usually, the documents will make provisions for who the intended beneficiary of the policy will be. Some of these kinds of transfers operate outside the ambit of a Will or other testamentary document that the grantor may have prepared.

A comprehensive estate plan, in addition to considering many of the above planning tools, should provide for the wellbeing of the grantor and his or her spouse and dependents in the event of long-term incapacity, illness or death. In order to achieve this, it is important to ensure that the estate planning document of the grantor is properly drafted with the support of a well-seasoned legal practitioner.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions