Saheedat and Ibrahim watched Babatunde holding on to his father’s hands. Mr Kosoko had just passed on in the private hospital they’d brought him to a few hours ago. It was a few minutes to the start of the new year and a painful way to end the year, but Saheedat was happy that things were mended before the end. She’d known that the man would not last long after that evening when he told her about his losses. Not many could survive the magnitude of the loss — not when they had worked so hard to build a reputation that was now gone. Mr Kosoko’s life had been tied to his material worth, and once that was gone, he went along with it.
The night Babatunde returned to the house from Mawon’s party, Mr Kosoko had heard his son weeping — a thing he had not heard since he was a young boy. When Babatunde confessed all, Mr Kosoko had sat beside his son and held his hand. “We are the same,” Mr Kosoko said. Babatunde recalled how his father talked about his mother for the next hour. Just like him, he had cried when his heart was broken. Perhaps because they had both travelled the same road, Mr Kosoko saw a sliver of hope in his eldest son.
This was where Saheedat had come in. One afternoon, Mr Kosoko had called her and asked her: “Can you help my boy? If this boy can change his life, I will go a happy man. He respects you, not this Victor man. You know their mother left them at a young age. They are still looking for their mother; they just don’t know it. You’re like a mother to him.” And so Saheedat had taken on coaching Babatunde, helping him to heal from his heartbreak and build a plan for his life and career. Broken and at his lowest, Babatunde soaked in all her lessons and instructions. Not even when she was in the throes of morning sickness and unable to monitor him did he turn from her guidance. With Victor and Ibrahim helping with the more technical things, they were able to get Babatunde enrolled in a business school — to learn practical knowledge for his business and earn a diploma. Bolu was away as always.
As the new head teacher for the sciences, Layo found herself attending more conferences within the city and in neighbouring countries. This meant she was away more often and had less time to teach as many students as she used to. However, she kept a few serious clients who were prepared to pay her fees. Layo was not too busy to notice that Ken wasn’t doing very well. He had stopped talking about the real estate business and barely talked about his old friends. He was on the lookout for another business. One day, he asked her for the capital to start a new bakery business.
She sat him down and asked what his business plan was. Ken looked her straight in the eye and said, “I will lose my car if I don’t do something.” “The children will go hungry if I give you this capital. Where do you expect me to get one million naira? We need to pay the rent or move out.” “Move out? Why do you want us to leave this compound? I don’t know what you will do, Layo, but I can’t lose that car. Things will be tough if I lose it.” Layo sighed. Ken would be truly miserable and make the house hell for her if he lost the car. Yet, there were numerous expenses to cater to, and she was not going to return to the person she used to be before she met Victor. “No, Ken, things will not be tough. If you want to keep the car, become a commercial driver.”
Reflections
Estate Planning
Estate planning simply means designing how your assets will be preserved, managed, and distributed when you pass on.
According to the Black’s Law Dictionary, estate planning is the preparation for the distribution and management of a person’s estate at death through the use of wills, trusts,
insurance policies, and other arrangements, especially to reduce administration costs and transfer-tax liability”. This dictionary definition brings us to the second term, wills. A will is simply a document through which a person, called the “Testator”, specifies how he or she wants his property to be distributed upon his demise and appoints
persons, known as “Executors”, to manage this distribution.
A will has to be in writing and signed by the Testator in the presence of at least two witnesses. Finally, we look at trusts. A trust is created where an individual, called the “Settlor”, appoints another party, called the “trustee”, to hold and administer assets, and
effectively transfer these assets to certain persons, called “Beneficiaries”, named by the Settlor. The trust is governed by a document (called the “trust deed”) which contains
terms and conditions, as well as, instructions of the settlor,which the trustee must fulfil.
What then is the relationship between wills, trusts and estate planning?
If you guessed that wills and trusts are used for estate planning, you would be correct as they are both estate planning devices. With either a will or a trust, a person can specify exactly how he would want his assets to be distributed upon his death. Though both options are similar, they have fundamental differences. Knowing the pros, cons and applicability of both wills and trusts will help a person determine which option best suits him or her.
What are the similarities and differences between a will and trust?
Let’s start with the similarities: They can only be made by adults who have sound minds and are not under any undue influence. They must be written in clear terms and duly signed. In both cases, the beneficiaries must be easily identifiable and the assets to be distributed must be clearly described in a manner that is easy to locate.
Now, to the differences. A will is testamentary, which means that it only takes effect when the testator has died, while a trust when structured as a living trust takes effect
from the date of signing, meaning that the settlor can make use of assets in the trust while alive, or a testamentary trust that takes effect when the settlor dies.
Assets in a will are subject to probate taxes, usually at 10% of the net asset value, while assets in a trust are only subject to income taxes. A will is a public document, and
anyone can gain access to it upon payment of relevant fees at the probate registry. A trust on the other hand is a private document, only accessible to persons permitted in the trust
deed.
How do I know which option to use?
The decision on which option to use, or whether to use both a will and a trust, lies with the individual that wants to plan their estate. With what we have discussed so far, you may or may not have been able to identify your preferred option. The amazing thing is, wherever you are in your decision-making journey, Investment One can provide the professional assistance you need. Our versatile and highly experienced team is available to handle all aspects of estate planning, including writing and reviewing wills, preparing trust deeds, establishing trusts and functioning as executors. The summary is, whatever you do, please put an estate planning arrangement in place. Do not die without a plan.
