Efficient organization, management, and administration of assets, investments, and wealth are paramount for individuals with substantial resources. Taking deliberate measures and employing unique strategies in this regard ensures the preservation and seamless transfer of accumulated wealth. Estate planning, a deliberate and intentional process, plays a crucial role in managing assets during one’s lifetime and beyond, including posthumously or in the event of incapacitation.
Estate planning involves more than just the distribution of assets after death; it encompasses establishing mechanisms for continuous growth and achieving specific goals set by the estate owner. Wikipedia defines estate planning as the process of anticipating and arranging, during a person’s life, for the management and disposal of their estate in the event of incapacitation or death. This includes reducing uncertainties over estate administration, ensuring specific goals are met, such as funding successors’ education, supporting charitable causes, and preserving accumulated wealth.
In Nigeria, the concept of estate planning is gaining prominence, with wealthy individuals and families increasingly adopting deliberate strategies for a seamless transition of wealth. This article aims to provide insights into the concept of estate planning, its methods and techniques, and key considerations.
Conventional Methods
Traditionally, the focus of patriarchs and matriarchs in estate planning in Nigeria has been narrow, often limited to the distribution of wealth after death. This approach may result from a lack of awareness of alternative structures that facilitate continuous wealth growth and ensure the legacy endures. Some conventional methods include:
- Customary Practice: Historically, wealth succession in Nigeria has been predominantly based on customary practices and laws, primarily for deceased male individuals. Upon demise, family members share the deceased’s wealth according to established customs and cultural traditions. However, this approach can lead to conflicts, marginalization, and misappropriation of assets in the absence of clear instructions from the deceased.
- Wills: Wills, or testaments, are widely accepted in Nigeria and globally. A will is a legal document that outlines how a person’s assets should be distributed upon their death. The testator appoints an executor to oversee the estate and ensure compliance with the stipulations in the will. However, wills are enforceable only after the testator’s demise. Despite their acceptance, wills may not completely eliminate the risk of disputes and misappropriation, as survivors may contest the provisions, leading to prolonged court proceedings.
- Deed of Gift: A Deed of Gift is an estate planning tool wherein a donor voluntarily transfers legal ownership and rights over property to another person (the donee) without receiving consideration in return. Unlike a will, a deed of gift can be executed during the donor’s lifetime. For validity, it must be executed and delivered by the donor to the donee.
While these conventional methods are widely used, challenges such as disputes and misappropriation underscore the importance of exploring comprehensive and contemporary estate planning strategies.
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