Everything You Need to Know about Estate Planning in Nigeria

Did you know that more than 60% of Nigerian adults don’t have an estate plan? This leaves their families open to legal battles and financial uncertainty. Estate planning is crucial for everyone, not just the wealthy. It’s about making sure your assets are managed and distributed according to your wishes, both during your life and after you’re gone.

Estate planning in Nigeria involves creating legal documents like wills, trusts, and powers of attorney. It includes strategies for managing assets, planning for taxes, and ensuring your dependents are financially secure. The main benefits? It helps avoid family fights over inheritance, ensures your business and financial interests continue smoothly, and takes care of your dependents, especially minors or those with special needs.

So, what exactly is a will? It’s a legal document where you specify how your assets should be divided after death. In Nigeria, a will must be written and signed by the person making it, witnessed by at least two people who aren’t beneficiaries and made voluntarily. Trusts, on the other hand, are arrangements where a trustee manages assets for beneficiaries. Trusts can protect your assets from creditors, manage them for minors or special needs dependents, and support charitable causes.

A power of attorney lets someone else act on your behalf if you can’t, say due to illness. There are different types: a general power of attorney grants broad powers, a special power of attorney is limited to specific tasks, and an enduring power of attorney remains effective even if you become incapacitated. Healthcare directives, like living wills, spell out your medical treatment preferences if you can’t communicate them yourself. You can also appoint a healthcare proxy to make medical decisions for you. Also, keep your beneficiary designations on assets like life insurance and retirement accounts up to date, as they override your will.

In Nigeria, estate planning is influenced by various laws. Customary law, which varies among different ethnic groups, often governs inheritance and estate distribution, especially in rural areas. Understanding these local customs is crucial. Statutory law includes the Wills Act, Administration of Estates Law, Trustees Law, and Marriage Act, which govern will creation, estate administration, trust management, and inheritance issues. For Muslims, Sharia law applies, prescribing specific shares of an estate to designated heirs.

Practical steps in estate planning include listing all your assets, setting goals, seeking professional advice, drafting necessary documents, regularly reviewing and updating your plan, and communicating it with your heirs. Start by listing everything you own: real estate, bank accounts, investments, personal property, and business interests. Determine your main objectives, like providing for family, supporting charities, or ensuring business continuity. Consult legal, financial, and tax professionals experienced in Nigerian estate planning. Regularly review your estate plan to reflect changes in assets or family situation. Communicating your plan can prevent misunderstandings and conflicts.

In a nutshell, estate planning ensures your assets are handled and distributed according to your wishes, providing peace of mind and security for your loved ones. Whether through wills, trusts, or other legal tools, a well-thought-out estate plan is key for effective financial planning in Nigeria.

DLM Trust Company is dedicated to offering clients access to the most experienced financial and legal professionals in estate management and administration. Our goal is to ensure a smooth transfer of your wealth to your loved ones. Our comprehensive estate planning and advisory services include robust will-writing solutions, executorship services, and trust administration. Let us assist you in preserving your generational wealth today.