An Evaluation of Estate Planning Mechanisms in Nigeria

Description

ABSTRACT

An Evaluation of Estate Planning Mechanisms in Nigeria

Abdul-Ghaniy Anjorin* & Mazeedah Hassan**

Estate planning focuses on preserving the estate of a person beyond his death. The major aim of estate planning, in the Nigerian context, is to simplify the administration of the estate of a deceased person, minimise probate fees and ensure that property passes to the intended beneficiaries. This paper surveys estate planning mechanisms in Nigeria and how tax obligations as well as other expenses can be reduced to the minimum. The paper further explores the various ways by which a person ensures that his wishes for beneficiaries of his estate are achieved and respected.

Keywords: Estate Planning, Wills, Administration of Estate, Probate.

INTRODUCTION
Ordinarily, an ‘estate’ means the whole of the property owned by anyone, the realty as well as the personality.₁ An estate is the amount, degree, nature, and quality of a person’s interest in land or other property; especially, a real estate interest that may become possessory, the ownership being measured in terms of duration.₂ The following constitute an estate: motor vehicles, jewelries, household items, cash, bank balances, dividends, shares and real estates. The Administration of Estate Law of Lagos State₃ did not give a definition of an estate but defines “real and personal estate” as every beneficial interest (including rights of entry and reverter) of the intestate in real and personal estate which (otherwise than in right of a power of appointment) he could, if of full age and capacity, have disposed of by the will”.₄

What then is Estate Planning? It is the way a person prepares for the distribution and management of his/her estate at death especially, to reduce administration costs and transfer tax liability.₅ It is the preparation for the orderly administration and disbursement of a person’s estate. The preparation includes taking actions that will minimise taxes and distribute assets to the appropriate heirs.₆ Estate Planning minimises the risk of disputes which often arise from failure to put up a plan on administration and management of a deceased’s estate. When a testator plans his estate, it helps to prevent unnecessary litigation and place assets in control of persons who would ensure the assets fulfill their purpose and are not wasted. Estate Planning saves both tangible and intangible resources including time, money and energy in deliberating on estate distribution or management. It aids the fulfillment of the wishes of a deceased after his demise as to how assets in the estate are to be administered or managed and a veritable means of transferring tax liability of the deceased.

* LL.M, BL (First Class Honours), ACIS. Associate, Moshood Shehu & Associates.
** LL.B, B.L, ACIArb. Counsel, Moshood Shehu & Associates.
An earlier draft of this paper was presented by Moshood Shehu & Associates at the Estate Planning and Tax Structuring Workshop organised by Meristem Trustees Ltd on Wednesday 26 April, 2017 at Clear Essence Resort Ikoyi, Lagos.

1. Kwara State Ministry of Agriculture & Natural Resources v Societe Generale Bank (1996) FHCLR 555 at 592, adopting the definition in Black’s Law Dictionary, page 491.
2. Bryan A. Garner, Black’s Law Dictionary, (Eight Edition) 1654.
3. Cap A5, Laws of Lagos State 2015.
4. Section 57, ibid.
5. Garner, (n 2) 1661.
6. David L. Scott, Wall Street Words: An A to Z Guide to Investment Terms for Today’s Investor (3rd edn, 2003); Estate planning defined.  accessed 7 November 2017.

THE GRAVITAS REVIEW OF BUSINESS & PROPERTY LAW VOL.8 NO.4