By Bamidele Kolawole

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A trust is a legal (document) arrangement through which an individual (or an institution such as a bank or a law firm), called a “Trustee”, holds legal title to property of another individual known as a “Settlor” or “Grantor” for a third party called a “Beneficiary”. A trust is created by a Settlor, who transfers some or all of his or her property to a Trustee. The trustee holds that property for the Trust’s beneficiaries.

A trust is a legal arrangement where a person (the settlor) transfers property to another person or entity (the trustee) to hold and manage for the benefit of one or more individuals or organizations (the beneficiaries). Trusts are commonly used for estate planning, asset protection, and charitable purposes.

Under the law of succession in Nigeria, there are several types of trusts, each serving different purposes and providing various levels of control and flexibility over the distribution of assets:

Testamentary Trust: This type of trust is created through a person’s will and only takes effect upon their death. It allows the testator to designate assets to be held in trust for specific beneficiaries.

Inter vivos Trust: Also known as a living trust, this trust is created during the lifetime of the settlor.

Assets are transferred into the trust and managed by the trustee for the benefit of the beneficiaries during the settlor’s lifetime and/or after their death.

Charitable Trust: A trust established for charitable purposes, such as the advancement of education, relief of poverty, or promotion of religion, science, or other purposes beneficial to the community. Charitable trusts are governed by specific legal requirements to ensure compliance with charitable objectives.

Discretionary Trust: In this type of trust, the trustee has discretion over how to distribute the trust assets among the beneficiaries. The terms of the trust grant the trustee flexibility to make decisions based on the beneficiaries’ needs and circumstances.

Fixed Trust: Also known as a non-discretionary trust, a fixed trust specifies how the trust assets are to be distributed among the beneficiaries, usually in predetermined shares or proportions.

The word trust does not connote the general meaning of trust, that is, having confidence in something or somebody, though, in a trust relationship, the element of confidence must be in the fore play. It emanates from a major aspect of our legal system that occasions many litigations in our courts from time to time.

A trust, thus, has been described as a relationship recognised by equity which arises where property is vested in a person(s) called the trustee(s), which the trustee(s) is obliged to hold for the benefit of other persons called ces tui que trust or beneficiaries.

The Trustee Act 1893 defines a trust and trustee in the following term:

“The expression ‘trust’ does not include the duties incident to an estate conveyed by way of mortgage, but with the exception the expression ‘trust’ and ‘trustee’ include implied and constructive trusts, and cases where the trustees has a beneficial interest in the trust

property, and the duties incident to the office of personnel representative of a deceased person.”

The principles of Trust are an offshoot of the principles developed by the English Court of Chancery and formally domiciled into our laws through several enactments.

The existence of such practice, though not fully as developed as the modern principles, attest to the ingenuity of certain legal components of trust under customary law.

The concept of family ownership of land in Nigeria served a purpose similar to that of trust, where the concept of individual ownership is a foreign one, rather, land belongs to the family and the head of family holds the family land in trust for the use of the family members.

The head of family to some extent assumes the position of a trustee and all members of the family have equal right to the property, so also is the Executive Governor of every state in Nigeria, they are to hold land in trust for the masses- Section 1 of the Land Use Act, 1978, it is a mis use of power when a sitting Governor starts acquiring land in choice locations within the state for personal and selfish use but not for public use as the statute permits.

ESSENTIALS OF TRUST

Three conditions are required for a trust to be validly constituted. In the case of Knight v Knight,

Lord Langdale, M.R., enunciated the three essentials of a valid trust to wit: (a) the words must be certain, that is, the words employed must be so used that taken as a whole, they ought to be construed as imperative; (b) the subject matter of the trust must be certain: and (c) the objects or person intended to have the benefits of the trust must also be certain.

The various requirements are the three essentials of a trust. They also described as the three certainties of a trust.

Trust may be put in place basically because of the necessity to ensure that provision for members of the settlor’s family are well catered for.

Therefore, this concept becomes a veritable tool for management of these wealth for the usage of family members.

This concept came into the Nigerian Legal System as a result of family property and communal ownership of land.

Notably, the idea of this concept of trust becomes a sine qua non that if peradventure, a father who has a child and dies before the child attains age of maturity, leaving all his properties for him, the view of law is that since the child is still a minor, the properties will have to be held by an adult in trust for him until he/she attains the age of maturity which is different from the normal eighteen years stipulated by our constitution, this is twenty one years according to Land Use Act, 1978.

A trust is a legal (document) arrangement through which an individual (or an institution such as a bank or a law firm), called a “Trustee”, holds legal title to property of another individual known as a “Settlor” or “Grantor” for a third party called a “Beneficiary”.

A trust is created by a Settlor, who transfers some or all of his or her property to a Trustee. The trustee holds that property for the Trust’s beneficiaries.

Trusts have existed since Roman times and have become one of the most important innovations in property law. Full title and property rights are transferred to the trustees to act in the interests of the beneficiary as set out in the trust deed.

Types of Trust

Express Trust: This is the one created by the act of the owner of property, either inter vivas (during life time) or by will. The three possible method of creation of this type of trust are as follows:

(a) declaration of trust inter vivos by the settlor. Here the settlor declares that henceforth he will hold his property on trust for certain beneficiaries;

(b) conveyance of property to trustees inter vivos. Here the trustees are directed to hold property upon certain trusts; and

(c) disposition of property to trustees by will. Here the trust will not arise until after the death of the testator.

Implied or resulting trust: This is the one arising from the presumed intention of the owner of property. It is also known as presumptive trust. It may arise in any of the following circumstances:

(a) Where an express trust fails;

(b) Where the beneficial interest under an express trust is not fully disposed of or exhausted; or(c) Where there is a purchase in the name of another, or where a person makes a voluntary conveyance of his property to another.

Constructive trust: This is a trust imposed by equity irrespective of the intention of the owner of the property, when it would be an abuse of confidence for him to hold the property for his own benefit. Examples are:

where a stranger to the trust meddles with the trust property. Equity regards such a person as a trustee de son tort and he holds the property on a constructive trust;

(ii) a recipient of trust property from an express trustee holds the property as a constructive trustee unless he is a bona fide purchaser for value without notice of trust.

(iii) any profit made by a trustee or other fiduciary in the execution of his duties will be held by him on a constructive trust for the beneficiaries or other persons entitled.

Also, (iv) a mortgagee who, in the exercise of his power of sale has sold the mortgaged property, is a constructive trustee of any proceeds of sale left after paying to himself the amount of the loan plus interest and the costs of the sale; and; a vendor of land is a constructive trustee of the land for the purchaser between the signing of the contract of sale and the actual conveyance.”

Private and Public Trusts: Trusts may also be divided according to their end purpose into private and public.

Private Trust: Where a trust is for the benefit of an individual or a group or class of individuals or for some private purpose, and not for the benefit of the public at large, it is private. It may be enforced by the beneficiaries.

Public Trusts: These are charitable trusts where the object is to promote the public welfare even if incidentally it confers a benefit on an individual or a class.

In describing Trust, Keeton in The Law of Trusts, Eight Edition, p. 3 cited in Jegede, M.I. (1999) submitted that trust is the relationship which arises whenever a person called the trustee is compelled in equity to hold property, whether real or personal, and whether by legal or equitable title, for the benefit of some persons or for some object permitted by law, in such a way that the real benefit of the property accrues, not to the trustee, but to the beneficiaries or other objects of the trust.

Trust is a situation whereby individuals control or plan the distribution of their property or estate either in their life time or after their death by executing a written Declaration of Trust directing one person or more persons or corporate trust company called a trustee(s) to hold their property or assets in accordance with the terms and conditions contained in the trust instrument for the benefit or one or more persons or a section of the general public, called the ‘beneficiaries’ or cestui que trust, who are the equitable owners of the property or assets, while the legal interest is vested in the trustee.

 In a trust, the trustee occupies a position of confidence and must act in good faith with respect to the trust property.

He is in a fiduciary relationship with the beneficiaries and must act honestly, not make secret profit, must deal with the trust property for the benefit and in the interest of the beneficiaries and not act in a manner that can jeopardize such interest.   

As applicable in probate, the Court is also open for testing the validity and management of a trust. This is often the case after the death of the Settlor. Although, issue of trust is not common in many parts of Nigeria.

Ways of Creating Trust

1. Inter vivos trust (Written Declaration of Trust) or contract

2. By Will

3. By Statute

Written Declaration of Trust (inter vivos): This is created during someone’s lifetime i.e. inter vivos and such a trust is called a living or inter vivos trust, in such a case, the person creating the trust is referred to as the grantor, settlor or donor.

The trust agreement or declaration usually contains the provisions guiding the trust and in the event of the death of the settlor, the trust property will be regulated by the provisions of the trust rather than the Will of the settlor or provisions of any statute.

This is because a trust may supplant a Will since all the estate of the settlor would have already been planned and settled by the trust before the settlor’s death.

A trust created inter vivos may be revocable or irrevocable if such provision is reserved in the instrument creating the trust. The manifestation of the intention to create a trust on the part of the settlor must be very clear.

By Will: This is also referred to as a testamentary trust and the terms and conditions of such trusts are contained in the Will creating it. This is usually activated after the demise of the grantor. It requires utmost validity of both the Will and of the trust.

Failure to comply with the above provisions of the law will render the trust to be void and no interest will pass under the will.

Exceptions to this are secret trusts, whereby irrespective of the non-compliance with the provisions of the law, dispositions made.

By Statute: This is by the creation of law. The Nigerian Land Use Act also embodied the concept of trust by vesting the control and management of land in each State of the federation in the Governors to be held in trust and administered for the use and common benefit of all Nigerians, even though, nobody can call him to give account. See the Supreme Court decision in Abioye v. Yakubu [1991] 5 NWLR (Pt. 190) p. 130.

Constitution of Trust

Trust must comply with the provisions of law in creating a trust, coupled with the presence of clear intention of the testator to create a trust.

The testator must also convey the property which is to be the subject matter of the trust to the trustee. , a process called constitution of trust.

The beneficiary upon conveyance of the trust property to the trustee, an equitable interest is created in his favour while the legal interest is vested in the trustee.

Thus, where the settlor conveys no property, then the trust is said not to be constituted and no interest passes to the beneficiary.

Benefits of Trust

Trust inter vivos may be used for the purposes of asset planning and management, for the settlor’s own benefit and may be used to dispose or distribute the settlor’s asset after his/her death.

Trust may be used as a means of financial support and life insurance for a settlor who is incapacitated or having some disabilities or as a security during old age.

A trust can also be used to support a spouse in the event of one of the spouses dying before the other.

It can also be for the education endowment of settlor’s children or other persons who may be underage at the time of the settlor’s death.

Trust may also be used as a means of giving out gifts or transferring property to loved ones, family members or other objects.

A trust can equally be used to benefit or improve a definite section of the society or such a section of the general public. It is common with education and religion.

There are several types of trusts recognized under Nigerian law, including:

Fixed Trust: A trust where the beneficiaries and their shares are fixed and specified in the trust instrument.

Discretionary Trust: A trust where the trustee has discretion to decide which beneficiaries to benefit and to what extent.

Charitable Trust: A trust established for charitable purposes, such as education, religion, or public benefit.

Private Trust: A trust established for the benefit of specific individuals or families.

Resulting Trust: A trust that arises where a person creates a trust but fails to specify the beneficiaries.

Constructive Trust: A trust imposed by law where a person has acquired property through unfair means.

Express Trust: A trust created intentionally by a settlor through a trust instrument.

Implied Trust: A trust arising from the circumstances of a situation, such as a resulting trust or constructive trust.

It’s important to note that Nigerian law also recognizes other types of trusts, such as testamentary trusts (created through a will) and inter vivos trusts (created during the settlor’s lifetime).

There is no gainsaying the fact that inheritance reduces crime in the society, ensures cohesion and continuity of the family unit which is a microcosm of the larger society as well as perpetuates the progeny of the deceased and his unborn generation.

Testate and intestate succession have biblical origin and are backed up by law, either written or unwritten legislations.

In Nigeria, Intestate succession is predominantly regulated by Native law and Custom, hence it is replete with discriminatory practices.

Intestate legislations of some States in the US that appear to promote crimes such as murder, manslaughter and bigamy should be repealed.

Nigeria needs to urgently codify its various Customary laws on Intestates Succession as well as empower the Federal and State Ministries of Justice to carry out intensive enlightenment programmes on testate succession amongst its citizenry.

Navigating Trusts in Nigerian Succession Law Trusts are a vital component of succession law in Nigeria, facilitating the orderly transfer of assets upon an individual’s passing.

Governed by both statutory provisions and common law principles, trusts play a crucial role in ensuring the wishes of the deceased are respected while protecting the interests of beneficiaries.  There are various types of trusts prevalent in Nigerian succession law:

Express/Testamentary Trusts: These trusts are intentionally created by the deceased through a will. They come into effect upon the testator’s death, allowing for the management and distribution of assets according to specified terms.

Implied Trusts: Arising from circumstances or conduct rather than express declaration, implied trusts protect the interests of beneficiaries when property is held for their benefit without formal declaration. Resulting Trusts: Occurring when property is transferred without the intention for the recipient to become the beneficial owner, resulting trusts ensure assets are held for the benefit of specified beneficiaries.

Constructive Trusts: Imposed by the court to prevent unjust enrichment or remedy wrongdoing, constructive trusts address situations involving fraud, undue influence, or other misconduct in relation to the deceased’s estate.

Landmark cases such as Adefulu v. Oyesile, Ojora v. Lagos City Council, and Agbaje v. Adigun have shaped trust law principles in Nigeria, providing valuable precedents for understanding the application of trusts in succession matters. 

Navigating trust law requires careful consideration of legal requirements and seeking professional advice to ensure compliance with relevant laws and regulations.

Trust creation can be complex, varying based on jurisdiction, making it essential to approach it with diligence and expertise. 

By understanding the intricacies of trusts in Nigerian succession law, individuals can effectively manage their estate planning and ensure the seamless transfer of assets to designated beneficiaries.

When creating any type of trust, it’s essential to consider the specific legal requirements and seek legal advice to ensure compliance with relevant laws and regulations.