A Trustee is a Person or institution that oversees and manages a Trust.
The Trustee stands in a fiduciary relationship with respect to the assets/Trust property which is held on behalf of another (others) called the beneficiary (or beneficiaries).  A fiduciary usually takes care of finances or assets for another person.

A Trust is a legal contract/relationship where you (the Settlor) transfer assets to a legal entity, the Trust, which will be administered by a Trustee (such as FCMB Trustees or an individual) for the benefit of a beneficiary (which could be yourself or another person).

Trusts are separate legal entities, like companies, whose purpose is to hold and manage assets for you or for the benefit of others.

An irrevocable Trust is simply a Trust with terms and provisions that cannot be changed by the Settlor. This is distinguished from a Revocable Trust, which allows the Settlor to change the terms of the Trust and/or take the property back at any time.

Most people need both. A big advantage of a Trust is that it is generally the best strategy to avoid probate and protect financial privacy. Wills must be validated by Probate court, a lengthy and expensive process that can take six months to two years and, in some cases, even longer. Probating a will may involve solicitor’s fees, executor’s commissions, administrative and other court costs. Unlike Wills, Trusts are not subject to probate and therefore enable the Settlor keep his affairs private and minimize probate costs and estate taxes.

The Trust Deed is the document executed between the Settlor (You) and the Trustee and it outlines how, when and to whom your assets will be distributed, in accordance with your wishes.

• Ensure the orderly and private transfer of your assets/wealth/property.

• Safeguard the process of providing for loved or vulnerable ones-children, parents or wards.

• Help set up a structure to finance a child's or ward’s education after your demise.

• Manage your Estate Tax exposure.

• Legally avoid Probate costs.

• Legally shield assets from Creditor's claims.

• Provide a structured way to administer your personal and financial affairs should you become ill or otherwise incapacitated.

In all Trust arrangements, there will be 3 separate parties to the Trust-The Settlor, the Trustee and the Beneficiary.

• The Settlor is the benefactor i.e. the creator of the Trust, who transfers the assets to the Trustees.

• The Trustee is the one to whom the Settlor transfers the assets to hold in Trust for the beneficiaries. Legal ownership will pass from the Settlor to the Trustees but beneficial ownership resides in the beneficiary.

• The Beneficiaries are the persons who are entitled to use or enjoy the income or assets of the Trust.

• With a Trust, you can name one or more beneficiaries to receive your assets at your demise, just like a Will, but in this case, you legally avoid probate expenses. Probate Expenses and Estate Taxes can become excessive, making the assets inaccessible to your loved ones/beneficiaries. Trusts can provide for the tidy transfer of property without the expense, delay, or publicity of probate, and for professional asset management for beneficiaries.
• A Trust can endure beyond your lifetime, becoming a source of lasting income and upkeep for your spouse, a child or others whom you choose.
• A Trust will guarantee succession of property- by gifting assets to a trust; the Settlor is ensuring that the assets he is giving away remain within his family. For example, a Settlor can create a Trust for the benefit of his wife and specify in the Trust Deed that on his wife’s death, the assets will pass directly to his children or grandchildren. This prevents his wife from disposing of the Trust Property to a non-family member.
• The details of a Trust are, by nature, private, as opposed to a Will that can be easily accessed by the Public at the Probate Registry. Trustees are also required by Law to be discreet about all aspects/details of a Trust.
• A Trust can make provisions for a spouse, spouse from a previous marriage or children from previous marriages while keeping assets within the Settlor’s family.
• An Education Trust, which is different from an Education Savings Plan, can help with providing for the education of in-school beneficiaries upon the event of the demise of a Settlor. An Education Trust can either be a Stand-Alone Trust or it may be incorporated into a larger Trust.
• If your assets are transferred into a trust during your lifetime, those assets will not be subject to claims after your demise from family members or others whom you do not wish to share in those assets.
• In the event of the Settlor’s demise or incapacity, a Trustee (such as FCMB Trustees) will guarantee that the aims of the Trust as specified by the Settlor are realized.
• The Trust is separate from your estate and is therefore sheltered from creditors.
• The designated beneficiaries automatically receive the accumulated benefits even in the event of your demise, without recourse to a Will or Letters of Administration.

Stocks and Bonds

Real Estate (including Land)

Mutual Funds
Art
Intellectual property
Bank Accounts, Safe Deposit boxes
Notes payable (money owed to you)
Life insurance (or use irrevocable trust)

Our duties include to:

• To comply with the terms of the Trust Deed
• To act fairly between the beneficiaries
• To ensure that we do not put ourselves in a position where our interests conflict with those of the beneficiaries.  For example, we will not buy any Trust Property if it was for sale
• To keep accounts and provide information and accounts to the Settlor and or the beneficiaries upon request
• To take reasonable care in making investments. We will consider the suitability of any investment and the need to diversify.
• To protect Trust Assets
• To insure where necessary

– Unless trust documents state otherwise

• Ensure proper transfers of title of assets to be transferred into the Trust.
• Invest the Trust Property for the benefit of the Beneficiaries.
• Maintain detailed records of all assets and transactions.
• Review assets regularly for quality and performance.
• Ensure that payment and distributions are made to genuine Beneficiaries.
• Facilitate final transfer of Trust assets to the eventual owners i.e. Beneficiaries.

Generally, fees for Trust services are spelled out in the Trust document. Under normal circumstances, they are calculated annually, based on the level of responsibility assumed by the Trustee and the value of the assets in the Trust.

Our usual fees start from N150, 000 (take-on fee) and N100, 000 Annual Fees, depending on your specific needs and other variables. If we have to manage the Settlor’s assets after his demise, we will have a right to a management fee out of which we can pay a third party for the management.

No. You should start by discussing your financial and investment goals with us and with your Financial Adviser.

Ultimately, it is the purpose of the Trust that determines how the assets are invested, and it is the responsibility of the Trustee to see that the purpose is carried out. Often, FCMB Trustees will recommend a professional investment manager who will make investment recommendations based on the goals of the Trust, the needs of the beneficiaries and the time horizon.

No. You do not have to give up control when you create a Revocable Living Trust. You keep as much control as you want. Typically, the creator of a Revocable Living Trust stays in control by retaining the power to do one of the following:

• Withdraw Trust assets
• Change instructions to the Trustee by amending the Trust agreement
• Cancel the Trust all together

Trusts are variable and can be revised to cater to an assortment of wishes, situations and goals.  Many people still wrongly believe that Trusts are only for the wealthy. Here at FCMB Trustees, the majority of our customers do not classify themselves as wealthy, they do not have multi-million Naira Trusts. Whether you need to safeguard a retirement portfolio, or need assistance with your Estate Planning, you should consider our services.

In addition to possessing professional Estate Planning competences, we know how to take care of all Investment details since we are affiliated to an assortment of Investment and Wealth Management companies. We are therefore that One-Stop shop you’ve been searching for.

No. As you can see, our annual charges as Trustees are less than you were previously paying for Investment Advice or Wealth Management services.

Settlors often create a Trust where they act both as Settlors and co-Trustees. While Settlors are alive, they can continue to control all assets in the Trust because they are Trustees of their own Trust. He can also continue to be the beneficiary of all assets and income from the Trust. When the Settlor dies or becomes disabled, the Trust will name the successor Trustees (FCMB Trustees) who are given power and authority over the assets by the terms of the Trust Deed. A Living Trust is sometimes referred to as a Will Substitute. It is also called a Revocable Living Trust because it can be amended, changed or revoked by the Settlor during his lifetime.

Usually, Trusts are named after the Settlor. An example would be the Tolu Alabi Living Trust. A joint Trust for a married couple might be called the Tolu and Tope Alabi Living Trust. There is no difference between a Living Trust and a Family Trust when they are established during the lifetime of the Settlor(s) and are revocable trusts.

The name “Family Trust” is also used for Trusts that are established at the time of death for the benefit of the surviving spouse and children.

In order for a Living Trust to control your assets at the time of death or disability, all assets need to be titled in the name of your Trust. Funding your trust is the process of transferring your assets from you to your trust. To do this, you physically change the titles of your assets from your individual name (or joint names, if married) to the name of your trust. You will also change most beneficiary designations to your trust. The process of changing titles and beneficiary designations is what is referred to as “funding” the Trust.

To transfer cash or securities, FCMB Trustees will open an account in the Trust’s name, and the Settlor will instruct his or her bank or broker to move the funds from his or her account to the Trust’s account. For real estate, a deed is used to transfer legal title of the property from the Settlor to the Trust. All future insurance and property tax statements should be sent to FCMB Trustees and paid with Trust funds. Finally, to transfer an existing life insurance policy, the Settlor simply needs to obtain and complete a change of ownership form and change of beneficiary form from his or her life insurance company.

Funding a Trust is complicated and requires in-depth knowledge of Law, Banking, Forms, Deeds, Titling, Real Estate and the proper conveyance instruments. It is better to leave the hard work to FCMB Trustees.

If you have a Living Trust-based plan, you will still want to have a Pour-Over Will. Your Pour-Over Will does two things. First, it names guardians for minor children. Second, the Pour-Over Will assures that any assets that were not re-titled into the name of the Trust will pass through probate and into the Trust for proper distribution to loved ones.

A Pour-Over Will is a Will established by a Settlor who has already taken the necessary steps to set up a Trust, so that upon the death of the Settlor, all of his or her assets are to be transferred – or “poured over” – to the Trust.

The Trustee can only control assets titled in the name of the Trust. If assets are not in the Trust at the time of death or disability, the Trust will not effectively pass control of the assets to the person or persons that you have designated in the Trust. This means that assets might go through probate at your death. A pour-over will can provide a “safety net” for your Trust, but we recommend full and continuous funding of your Living Trust.

By Law, Trustees have the responsibility to follow the instructions in the Trust. This is called a Trustee’s fiduciary duty. The property and assets in the Trust are distributed to family members or distributed into one or more new Trusts (like the Education Trust) for the benefit of family members. In addition, the Trustee is required to satisfy creditors of the estate of the deceased Settlor, file income and estate tax returns, manage and liquidate assets, provide an accounting to beneficiaries and generally wind up the affairs of the person who has passed away. We call this process post-mortem Trust administration.

The Trust Deed sets out the scope of a Trustee’s powers. FCMB Trustees are also subject to a variety of other requirements imposed by the Securities and Exchange Commission.

Importantly, a Trustee has a fiduciary relationship with the beneficiaries. This relationship exists because of the Trust placed in the Trustee. To protect those in a vulnerable position (those putting Trust in the Trustee) the law recognizes this special relationship and places duties on the Trustee to ensure they act in good faith and the best interests of the Trust.

Yes, a Trustee can be one of the beneficiaries of a Trust. For example, an individual could set up a Trust, appoint himself or herself as Trustee and distribute income to their family. However, a Trustee cannot be the sole beneficiary of a Trust. This is because they would legally own property for the benefit of themselves.

Yes, you can. It is noteworthy though that the transfer of property into a Trust will generally be classified as a sale and this will attract Stamp Duty and perfection costs.

There are several advantages to naming FCMB Trustees as Trustee. Unlike other providers of Trust services, our skilled Trust advisors deal exclusively with Trust issues. The solutions our Trust experts provide are never “one size fits all,” but are individually tailored to fit personal needs.

In addition, FCMB Trustees offers:

• Professional management by trained experts
• Impartiality in making investment decisions and in dealing with beneficiaries
• FCMB Trustees’ commitment to placing our clients’ interests first and serving them with integrity, innovation, quality and hard work
• The confidence that comes from knowing your Trustee is subject to regular audits by external auditors and government regulators (Securities and Exchange Commission)

FCMB Trustees is a wholly owned subsidiary of FCMB Group.

Our Trust staff will be glad to assemble further information for you, analyze your trust requirements and answer questions not covered here. Please e-mail us at fcmbtrustees@fcmb.com or call our office at 01-2902721.