UTL Trust Urges Brokers, Others To Embrace Estate Planning

Trust Officer, UTL Trust Management Services Limited, Mrs Bolanle Komolafe, have called on Insurance Brokers and other Nigerians to take estate planning serious by making sure that everything about acquisition, preservation and distribution of assets is done in accordance with the law.

She made the call while speaking on “Preserving The Assets Through Estate Planning,” at the 2021 Mid-Year workshop organized by the Nigerian Council of Registered Insurance Brokers (NCRIB) Lagos Area Council recently.

Estate planning, according to her, is basically a guide on how an individual can own assets, manage and also preserve those assets during their lifetime and after they might have passed on.

“Estate planning is a combination of different stages of acquiring assets, preserving and distributing those assets – the essence of this is to make sure that everything is done in order and in accordance to the law.  The truth to the matter is that all of us, one way or the other, are involved in estate management. You go to work and you earn a living and you invest the asset, this is part of estate management.

“Anyone that purchases insurance product to secure assets is involved in estate planning but the problem sometimes is they tend to concentrate more in the first two stages of the planning and then neglect the last stage. We are acquiring, we are preserving it but when it comes to the distribution of these assets that is where the problem lies because many people oftentimes don’t finish these processes,” she said.

She said the same control that we have in the first two stages of estate planning which is acquisition and preservation is the same control that we can have in the last stage which is distribution.

Educating the audience on Wills – Ordinary Will and RSS Will, she said a Will states your intentions on how your assets should be distributed upon one’s demise, adding that with a Will, you determine how your assets would devolve onto your loved ones.

Whilst RSA Wills, according to her provides for how the amount standing in your Retirement Savings Accounts with the PFA could be easily accessed and disbursed to your loved ones upon one’s demise in accordance with the Pensions Reform Act,2014.

Speaking on Trust, she said a trust is traditionally used for minimizing estate taxes and can offer other benefits as part of a well-crafted estate plan. A trust is a fiduciary arrangement that allows a third party, or trustee, to hold assets on behalf of a beneficiary or beneficiaries. … Other benefits of trusts include Control of your wealth.

She listed the benefits of Estate Planning to include the management of an individual’s property in the event of incapacity; proper distribution of assets; the protection of beneficiaries; for a speedy and efficient transfer of an individual’s assets; to minimize cost and avoid disputes and to minimize estate taxes.

“Estate Planning shields us.  It protects our assets from losses. Estate planning ensures that not only are we got protected, not only is the person who made the estate planning protected, estate planning is also a good tool for financial planning. It can take care of underage children, even incapacitated people – both the person that is making the estate planning and the beneficiaries are all protected. It ensures that your assets do not fall into the hands of unintended persons.

“Apart from ensuring the protection of assets and dependents, fulfilment of the wishes of the maker of the Will, it also ensures that assets get to intended persons/loved ones.

“It ensures avoidance of intestacy (Law and Custom decides), reduction of family rancour and litigation, the confidentiality of the arrangement, professional management of assets, identification of assets worldwide, management of complications of past life and management of diverse interests,” she explained.

She also highlighted the reasons why people need estate planning, namely: To avoid Probate: A probate is a process of validating a deceased person’s will and placing a value on their assets, paying their final bills and taxes, and distributing the rest to their beneficiaries. Avoiding probate is by far the most common reason why people seek out the advice of an estate planning attorney. While many have never dealt with probate, they still know one thing: they want to avoid it at all costs. This stems from probate horror stories covered by the media or told by neighbours, friends, or business associates.

She said for the vast majority of people, avoiding probate is a very good reason for creating an estate plan and can be easily achieved.

“Reduce Estate Taxes: The significant loss of one’s estate to the payment of state and federal estate taxes or state inheritance taxes is a great motivator for many people to put an estate plan together. Through the most basic planning, married couples can reduce or even possibly eliminate estate taxes altogether by setting up AB Trusts or ABC Trusts as part of their wills or revocable living trusts. Also, a variety of advanced estate planning techniques can be used by both married couples and individuals to make the estate or inheritance tax bill less burdensome or completely go away.

“To avoid a Mess: Many clients seek the advice of an estate planning attorney after personally experiencing or seeing a close friend or business associate experience a significant waste of time and money due to a loved one’s failure to make an estate plan. Choosing someone to be in charge if you become mentally incapacitated or die—and deciding who will get what, when they will get it, and how they will get it—will go a long way towards avoiding family fights and costly probate court proceedings.

“For Protection of Beneficiaries: There are generally two main reasons why people put together an estate plan to protect their beneficiaries: To protect minor beneficiaries or to protect adult beneficiaries from bad decisions, outside influences, creditor problems, and divorcing spouses. You can prevent family discord and costly legal expenses by taking the time to designate a guardian and trustee for your minor beneficiaries. Or, if the beneficiary is already an adult that’s bad at managing money or has an overbearing spouse or partner who you fear will squander the beneficiary’s inheritance or take it in a divorce, you can create an estate plan that will protect the beneficiary.

“For Assets Protection: Asset protection planning has become a significant reason why many people, including those who already have an estate plan, are meeting with their estate planning attorney. Once you know or suspect that a lawsuit is on the horizon, it’s too late to put a plan in place to protect your assets. Instead, you need to start with a sound financial plan and couple that with a comprehensive estate plan that will, in turn, protect your assets for the benefit of both you during your lifetime and your beneficiaries after your death.

“You can also provide asset protection for your spouse through the use of AB Trusts or ABC Trusts and your other beneficiaries through the use of lifetime trusts. This can also include electronic assets.

UTL Trustees renders estate planning services through multiple channels: “WillPower” – Online Services. On the cost of service, RSA Will and Simple Will/Trust is N50,000.00. For offline services, Comprehensive Will/Trust attracts N250,000.00 and above.