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Private Client - March Edition
- 1. trust), unlike aWill, which is re- quired to go through the probate process. The cost of a probate is often greater than the cost of managing and distributing comparable assets held in a living trust. Generally, the assets and their value (as well as the identities of the bene- ficiaries) under a trust would not be open to public scrutiny since a re- cord of same is not required to be kept with the probate registry, unlike a Will. The above notwithstanding, a Will may also be used concurrently with a living trust. For instance, assets ac- quired subsequent to the settlement (on trust) are not likely to be included in it and in such cases a Will may be helpful to deal with such assets. The terms of the trust may also be drafted in such a way to admit new items of property. In the myriad of financial commit- ments and wealth accumulation activities, everyone with loved ones will at some point have given thought to what happens to them when they are no more. What of- ten comes to mind when consider- ing one’s dependants is a Will; leave a Will and your loved ones will be cared for. A Will however is not the only means by which this can be achieved. A trust made inter vivos (a living trust) is also an op- tion. In general terms, a trust is an ar- rangement where one person or institution (a trustee), holds settled property of another (the settlor) for the benefit of others (beneficiaries): dependants, relatives etc. Specifically for these purposes, a "living trust" (as distinct from one taking effect on death) is a trust created during the lifetime of a settlor. Readers of the January edi- tion of this letter will recall the ref- erence to Will Trusts. Just like a Will, a living trust sets out a settlor’s wishes as regards distribution of his property (i.e. those who he wants to benefit. The settlor may also be a beneficiary himself). The significant difference is that a Will takes effect only after the settlor passes on. The assets in a living trust may, depending on the terms of the trust, become available to the beneficiaries during the settlor’s life- time. Put simply, a settlor may elect to transfer his assets into the trust for his benefit and after his lifetime, the assets will then be transferred to the beneficiaries. When all the assets have been transferred to the beneficiaries, the trust ceases to exist. Naturally, one may wonder why a living trust might be preferred over a Will for es- tate planning/succession purposes. The benefits include the following: Unlike a Will, a trust is not bogged down by the legal process of probate (a court- supervised process for transferring assets to the beneficiaries listed in one's Will), which may be protracted due to activities involved in proving the Will. In addition, a trust gives immediate ac- cess to the assets (within the terms of the ON LEAVING SOMETHING BEHIND: WHY YOU MAY WANT A LIVING TRUST INSTEAD PRIVATE CLIENT UPDATE A PUBLICATION OF THE PRIVATE CLIENT DEPARTMENT MARCH 2015 EDITION PERCHSTONE & GRAEYS Abuja Office: D3, Jima Plaza, 1627 Ahmadu Bello Way, Area 11, Garki; +09-8765837, +234 7045984788, 7045984792 Benin Office: 40, Adesogbe Road, Benin City, Edo State. Email:tosinalabi@perchstoneandgraeys.com or oluwatelemiolajames@perchstoneandgraeys.com Website: www.perchstoneandgraeys.com Copyright: All rights reserved. No part of the publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means without the prior permission in writing of Perchstone & Graeys or as expressly permitted by law. Disclaimer: The content of this document is solely for information purposes only and should in no way be construed as legal opinion. We urge you to contact us should you require specific legal advice on any of the topics treated in this publication.