Generational wealth and legacy transfer – Part 2
It can be done by either executing a Deed of Gift in favour of the beneficiary or buying properties in the name of your children. This was developed to avoid cases of disputes after the demise of the parent, so that in his lifetime, he takes the decision on wealth transfer and enforces it. An example of gift inter vivos is the Biblical case of the prodigal son, who compelled his father to share his wealth in his lifetime only to end up squandering them on riotous living. The lesson in this is for the father/mother to ensure close monitoring of the use of the asset that has been transferred to avoid wastages and abuses.
Will: A WILL is a legal document through which an individual referred to as a testator, dictates how his/her property should be distributed after his demise. By authoring a will, an individual can make sure that his/her assets are passed down to his/her children, grandchildren, relations and even organisations, religious bodies and the likes, in a particular format.
Why write a will?
1. It eliminates the application of customary law to the deceased’s estate.
2. It helps to determine how your properties would be distributed to avoid confusion, wasteful dissipation of wealth/assets and intermeddling by strangers.
3. To appoint executors of your estate; Executors are the persons who control a deceased’s estate and are responsible for the transfer of the deceased’s properties to the beneficiaries. Therefore they should be persons who are trusted and responsible.
4. To cater for matters such as guardianship, in a situation where the Testator has young children or children with special needs.
5. Specific instructions as to funeral arrangements can also be included in a Will.
The making of a will
Once you have anything of value, it is important to list them, identify them and state the purpose. Prayerfully determine those who you can trust with a good sense of judgment as Executors but it is always better to consult your legal adviser to assist you in this regard. The issue with Wills is always about the good/bad intentions of the Executors/Beneficiaries.
Myth- Writing my Will means that I would die soon. Reality- Writing my Will means that I am taking adequate precautions to dictate how my affairs would be handled after my demise. Myth- disputes over properties only exist in polygamous families. Reality- disputes over properties exist in families where survivors are from the same parents.
Another option is to acquire assets in the joint names of the couple, for instance to buy land in the name of Mr. Joe Musa and Mrs. Jane Musa, being careful to ensure that both names are reflected separately and not as Mr. and Mrs. Joe Musa. The couple should be careful to ensure that they sign on the document separately.
This occurs where you own either businesses or companies, which will not by operation of law devolve to your children, being that the operations of companies are regulated by law and there is no connection of blood or other relationship for corporate wealth transfer. In corporate wealth transfer, wealth/assets are owned by companies whose shareholders, directors and owners are your family members so that in case of untimely death, succession devolves automatically.
This is governed by the Trustee Investments Act (Cap T22) Laws of the Federation of Nigeria 2004. Trust refers to a legal arrangement wherein an individual or an institution (a bank, law firm, Trust companies etc.) called a “Trustee” holds legal title to the property of another individual known as a “Settlor” or “Grantor” for a the benefit of another called a “Beneficiary”.
A Trust is created by a “Settlor”, who transfers some or all his or her assets to a “Trustee”. The Trustee in turn holds all the assets for the beneficiary (ries). Title and property rights are usually transferred to the Beneficiary as set out in the trust Deed. This arrangement can be most useful for providing for children who have not attained the majority age of 18 years.
Wealth transfer under the Marriage Act
Legally speaking, a person married under the Act is entitled to and inherits one third of the estate of his/her spouse. That is, both husband and wife are entitled to each other’s estate upon intestacy (that is, where the person in question dies without making a Will). It is important to note that section 33 of the Marriage Act makes it illegal to contract statutory marriage with someone else other than a customary spouse.
Under and by virtue of section 35 of the Marriage Act, statutory marriage is stated to be between one man and one woman and it is not possible for anyone already married under the Act to be involved in any subsequent marriage. This type of marriage is protected under section 39 of the Act which states that an unmarried cannot validly contract a marriage with a person already married under the Act. Statutory marriage is the will of God for us all, stated in Genesis 2:24: “Therefore shall a man leave his father and his mother, and shall cleave unto his wife, and they shall be one flesh.” The protection offered under statutory marriage is encapsulated in section 11 of the Act, which revokes any Will that does not take into cognizance an existing union: “Every Will made by a man or a woman shall be revoked by his or her marriage (other than a marriage in accordance with Customary Law). Statutory marriage provides a safer method of guaranteeing wealth transfer, so long as one spouse survives the other.
Adegboruwa is a Senior Advocate of Nigeria (SAN).