Holding in Trust: A smart and prudent way to bequeath property to a minor

Holding in Trust A smart and prudent way to bequeath property to a minor

Protecting your assets and at the same time providing for your loved ones is a top priority for any parent. You may be an old-school businessman or an up-and-coming entrepreneur, but when it comes to your family no matter your status or social class, you want them to have the best possible future.

Passing on your assets to your family through a trust is one of the best ways to support them in the future. For many parents, their children’s welfare and working to ensure they are always safe, protected, and cared for is often the most important thing in their lives. How their children would fare if they do not live to old age, especially when they are minors, causes concern for these parents.

Many parents in a bid to address some of the above concerns, execute a deed of gift, donate power of attorney to their minors or make their children beneficiaries in their Will. Bequeathing property and assets to minor children using the above-stated means can create many legal complications. For example, a power of attorney can’t be donated to a minor. Also, a revocable power of attorney loses its validity after the death of the donor and an irrevocable power of attorney which remains valid after the death of the donor must be given for valuable consideration. Until a child attains the age of legal capacity, they are considered to be minors and will not be able to control any property or assets that were left to them in a Will or gifted to them in a deed of gift. This is in line with the Child Rights Laws of various States in Nigeria and the Child Rights Act[1], which provides that the statutory age for an individual to attain legal capacity is 18 years. Section 29(4) of the 1999 constitution[2] corroborated this by stipulating that the age of legal capacity is 18 years and above. Moreover, a person can only validly acquire landed property when such a person is 21 years old according to the Land Use Act[3].  The only exception to this rule as conveyed by Section 7b of the Land Use Act[4] is that a minor can own land or property in Nigeria where such a person who is below 21 years old inherits such property upon the death of his parent who died intestate. When a person dies intestate, the distribution of his property will be according to the customary law of inheritance and succession practised by such a person. Under customary law, minors can own land and properties provided the same properties are inherited from a parent whose properties are governed by the customary law of inheritance and succession. Section 7 (b) of the Land Use Act[5] stipulates as follows:

“a person under the age of twenty-one years upon whom a statutory right of occupancy devolves on the death of the holder shall have the same liabilities and obligations under and in respect of his right of occupancy as if he were of full age notwithstanding the fact that no guardian or trustee has been appointed for him.”

 Devolution of a statutory right of occupancy upon death is regulated by the customary law of the deceased parent. The customary system of inheritance and succession however is not a good option for bequeathing property to minors because it is fraught with a lot of discriminatory practices. For instance, there are the principles of primogeniture in which the eldest son inherits the property of his deceased father exclusively and of ultimogeniture in which the youngest son inherits the property of the deceased father to the exclusion of all others. Primogeniture is practised in Bini society, Nupe society and some others in the North. Under Igbo customary law, male children inherit land to the exclusion of female children in the family.[6]

Leaving your property in accordance with customary law does not guarantee you control over what will happen to it after your demise. You are not able to ensure your children inherit your property and are in charge of managing and distributing your property. All these decisions are left to family members and mischievous relatives. To circumvent this problem, aside from making Minors beneficiaries in a will, a parent can take a step further to protect their minors by using the method of Holding in trust. A trust can provide many benefits, like financial security, peace of mind, and guidance for the future. Furthermore, I will discuss the meaning of holding in trust and who may be an ideal trustee.

What does Holding in Trust Mean?

Holding in trust is a legally recognised structure where assets are held by a person or group of people (the trustees), for the benefit of another person or people (the beneficiaries). In a trust, a party known as a trustor gives another party, the trustee, the right to hold title to and manage property or assets for the benefit of a third party, the beneficiary. Trusts can be established to provide legal protection for the trustor’s assets to ensure they are distributed according to their wishes.

A Trustee is a person who acts as a custodian for the assets held within a Trust. He or she is responsible for managing and administering the finances of a Trust per the instructions given. The parent to the minor while making the will can expressly state how the funds should be invested or used for the benefit of the minor whilst held in trust.

You would be surprised at how many trust funds have been established for children. It has nothing to do with providing an excessive amount of cash so that the young person can buy whatever they want. Instead, a trust fund is established so that if the parents are not around to provide for the child, the child has a source of income and assets necessary to survive.

If you have life insurance, this probably sounds familiar. In fact, if you have life insurance, and your underage children are beneficiaries, they will have a trust fund established for them if you happen to pass away.

Most often, the person who creates the Trust(the parent) is the Trustee until he or she is incapacitated or passes away. At that time, the Successor Trustee steps in. A Successor Trustee is named second in line to serve as Trustee. If the Successor Trustee is either unable or unwilling to serve the role required, it can be a good idea to name an alternate just in case anything happens to the originally named person.

Who can be a trustee:

Ideal choices for a trustee can vary depending on the specific circumstances, but generally, trustees should be trustworthy, responsible, and impartial. It is very important to choose the right trustee and they should also have good financial and legal knowledge as they will be responsible for carrying out the wishes of the trust, managing the trust assets and protecting the interests of the beneficiaries. If you’re setting up a trust, it’s always a good idea to seek legal advice to make sure you’re making the best decisions for your family. The following are often considered as trustees: 

  • Friends/Family

    – A friend or family member who you trust can be a trustee for your minor. Someone who knows and understands your family dynamics and is willing to take up the risk. With the right person, the peace of mind this route offers is worth it. However, it also comes with the potential for family drama and even resentment.

  • Lawyer/Attorney

    – This is a wonderful option if you don’t have a close family member or friend to assume the role. A neutral third party, such as a lawyer, can be appointed if you just can’t decide and are concerned about hurt feelings or arguments among your loved ones. Another advantage is that your lawyer will understand your family if you have a close and long-standing relationship with your lawyer.


There are so many benefits to setting up a trust for a minor, including protecting the assets for their future and providing guidance and structure. Unfortunately, there are a number of mistakes that parents make when creating trust funds for their children. Many are the result of not knowing how these funds are supposed to work. Some of the likely mistakes that can occur and need to be avoided when creating a Trust Fund for your child are:

  • Not setting clear instructions for how the trust fund should be managed. This can lead to confusion and conflict among the trustee, the child, and other family members. When the instructions are not clear, the trustee may make decisions that the child disagrees with, leading to tension and frustration for everyone involved.
  • Not ensuring that the trustee has the necessary skills and experience to manage the trust fund. The trustee is responsible for managing the trust fund and making sure it is used for the child’s benefit. If the trustee does not have the necessary skills or experience, the trust fund may not be managed properly, which could negatively affect the child’s future. It is very important that a parent seeks legal advice before creating or setting up a trust.
  • Assuming family members are the best choice for trustees. Sometimes, family members or close friends can make good trustees, but in other cases, it may be better to choose a professional trustee, like a lawyer, bank or trust company.
  • Not having the appropriate party draft the trust document


[1] Child Rights Act

[2] Section 29(4) of the 1999 constitution of the Federal Republic of Nigeria

[3] Section 7 of the Land Use Act

[4] Section 7b of the Land Use Act

[5] Ibid

[6] Cases and Materials on Nigerian Land Law by Niki Tobi




Yvonne Ezekiel
Gukongozi Ugwuezi