Writing A Will

There are various ways of planning your estate. Wills are the traditional, affordable and relatively easy means of estate planning. Trusts constitute yet another estate planning vehicle now gaining increasing popularity.

This session is devoted to a discussion on Trusts.

6.1          WHAT IS A TRUST?

A trust is a legal relationship in which a trustee (which can be one person or a qualified trust company) holds property for the benefit of another (the beneficiary). The property can be any kind of real or personal property – money, real estate, stocks, bonds, collections, business interests, personal possessions, and other tangible assets. It is often established by one person for the benefit of another.

In those cases, it involves at least three people: the grantor (the person who creates the trust, also known as the settler or donor), the trustee (who holds and manages the property), and one or more beneficiaries (who are entitled to the benefits).

It may be helpful to think of a trust as a contract between the grantor and the trustee. The grantor transfers property to the trustee for certain purposes. The trustee agrees to manage and distribute the property in the way specified.

Putting property in trust transfers it from your personal ownership to the trustee, who holds the property for your beneficiaries. The trustee has legal title to the trust property while the beneficiaries have equitable title.

For most purposes, the law looks at these assets as if they are now owned by the trustee.

6.2          PARTIES TO A TRUST

The parties to a trust are the Settlor who owns the property, the Trustee who receives control of the settlor’s property and holds it in trust for the benefit of the Beneficiary. The settlor and trustee can be one and the person.


A trust can be likened to an imaginary container. In that wise, it is quite abstract. It is not a geographical place that protects your car. Rather. it is a form of ownership that holds it for your benefit. On your car title, the owner blank would simply read; ‘the trustee of the Goodness Udoh trust’. It is common to include bank and brokerage accounts as well as real estate into a trust.

After your trust is created, your assets would probably be in the same place they were before you set it up. But once the various assets have been transferred into the name of the trustee, they will have a different owner e.g., ‘the Goodness Udoh Trust’ not ‘Goodness Udoh’.

6.4          WHO NEEDS A TRUST?

6.4.1      Parents with young children.

6.4.2      People with beneficiaries who need help.

6.4.3      People who own hard-to-divide property.

6.4.4      People who want to control their property.

6.4.5      People concerned about estate taxes.

6.5          HOW TO SET UP A TRUST

You could establish a trust in your will. It is also possible to establish a trust directly. The provisions of the trust are contained in a Trust Deed. Provisions of the Trust Deed (not the will or laws of your country) determine what happens to the property in the Trust.

6.6          KINDS OF TRUST

6.6.1      Charitable Trusts: are created to support some charitable purpose. Often, these trusts will make an annual gift to a worthy cause of your choosing, simultaneously helping good causes and reducing taxes on your estate. You could create a trust to support the School for the Blind or Deaf or support Autism management in children etc. The list is endless.

6.6.2      Discretionary trusts: Permits the trustee to distribute income and principal among various beneficiaries, or to control the disbursements to a single beneficiary, as he or she sees fit.

6.6.3      Insurance trust: Are tax-saving trusts in which trust assets are used to buy a life insurance policy whose proceeds benefit the grantor’s beneficiaries.


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