A Comparison Between Will and Deed of Gift: Whether a Trust Settlement Can Be a Balance or Safe Haven for Property Owners

It is a common phenomenon in society for families to become embroiled in prolonged disagreements and legal disputes over the estate of a deceased person. Such disputes are not limited to ordinary households; they have also arisen in high-profile estates, including those of the late Festus Okotie-Eboh, the late Rotimi Williams, and the late Herbert Wigwe. These recurring conflicts often stem from inadequate estate planning, particularly the absence of a valid will or a properly constituted Trust. Even where a Will or Trust exists, dissatisfaction with its provisions may still generate tension among beneficiaries; the likelihood of conflict is significantly greater where no structured estate plan is in place.

This article undertakes a comparative analysis of three estate planning tools — Wills, Deeds of Gift, and Trust settlements — highlights their distinctions, and argues whether a Trust settlement can be a balance or safe haven for property owners.

The Meaning and Objectives of Estate Planning

Estate planning is the process through which an individual determines how their assets will be distributed to beneficiaries upon their death. It also involves arranging for the proper administration and settlement of a person's affairs after death. Its main objectives include minimizing estate taxes payable to the government, ensuring that sufficient funds are readily available to cover funeral expenses and other post-death obligations, and guaranteeing that assets are distributed in accordance with the individual's wishes.

Legal Framework on Estate Planning in Nigeria

Estate planning in Nigeria is governed by a combination of statutes, customary law, and Islamic law. The applicable legal framework depends largely on whether the deceased made a formal estate plan. In the absence of such a plan, the individual's estate may be distributed according to the statutory rules on intestate succession under the Administration of Estates Law, or in accordance with customary or Islamic law, depending on the relevant circumstances. Relevant legal frameworks include the Wills Act 1837, the Wills Law of various states, the Administration of Estate Law of various states, customary and Islamic law, the Trustees Act 1893, the Investment and Securities Act, and the Nigeria Tax Act 2025.

Comparative Analysis of Will, Deed of Gift, and Trust

A Will, as one of the tools of estate planning, refers to the legal document that conforms to the laws of the state where it is executed, whereby an individual makes known his desires for the disposition of his property at death. A Will is the most disputed of all the estate planning options, simply because of its testamentary nature — it takes effect only after the death of the maker. This is also a major clog, as a Will can be invalidated where it is established that there is non-compliance with the statutory provisions governing its making, content, execution, location, or administration.

There are two major factors that can invalidate a Will: incapacity of the testator at the time of making the Will (inferred from mental health, delusion, undue influence, or other suspicious circumstances), and lack of due execution. Wills are frequently contested on these grounds by dissatisfied beneficiaries or excluded dependants, and can sometimes be altered either by the testator during his lifetime or by the court, where the dependants of the deceased have not been provided reasonable financial support under the Wills Law of States.

Although a Will reflects testamentary freedom, this freedom is not absolute. It is subject to customary law restrictions — for example, under Benin custom, the 'Igiogbe' (the principal house where a deceased man lived, died, and was usually buried) is by custom inherited by the eldest surviving son — and Islamic law restrictions, which limit testamentary disposition to one-third of the estate for non-heirs, with the remaining two-thirds distributed according to Islamic inheritance rules.

A gift inter vivos is the voluntary transfer of property by a donor (the owner) to another person, the donee (the receiver), during the donor's lifetime, with the clear intention that the legal interest in property will not revert to the donor, and with the corresponding intention of the donee to accept and retain it absolutely. A crucial element of a valid gift inter vivos is acceptance by the donee — once validly accepted and completed, the donor loses the right to revoke it. As a general rule, gifts are irrevocable except where fraud, mistake, misrepresentation, or a total failure of purpose can be proved, and making a gift without a properly signed Deed of Gift will amount to invalidity of the transfer.

A Deed of Gift provides the legal foundation for a valid gift inter vivos and safeguards the donee's interest in the event of litigation. In Omoregie & Ors v. Bienose, the court held that for a gift to constitute a valid gift inter vivos, one must either produce and tender a deed of gift, if the grant was under English law, or call the grantor, successor in title, or a witness of the transaction to testify at trial, if under customary law.

Distinction Between a Will and a Gift Inter Vivos

A Will is testamentary in nature and takes effect only after the death of the testator, whereas a gift inter vivos takes effect immediately, during the lifetime of the grantor. Under a Will, the beneficiary does not take possession until after the testator's death, while a donee takes immediate possession upon execution of the Deed of Gift. A testator retains legal title even after executing the Will, whereas a donor is divested of legal title immediately upon execution of a Deed of Gift.

Probate and estate tax are mandatory for a Will, but probate does not apply to a gift inter vivos. A Will can dispose of properties acquired before or after its date, while a Deed of Gift can only transfer properties owned by the grantor at the time of execution. A Will also allows for management of properties in favour of beneficiaries through the creation of a trust within the Will itself, whereas a Deed of Gift does not allow for any management of the property in favour of the donee.

These distinctions demonstrate that while one instrument may be suitable in a particular circumstance, it may be inappropriate in another. Where an individual is deeply attached to his property or naturally cautious about relinquishing control, a Deed of Gift in favour of a child may be imprudent, since it immediately strips the owner of legal ownership and control. In such circumstances, a Will is often more suitable, since its testamentary nature allows the testator to retain full legal control throughout their lifetime, with transfer of ownership only taking effect upon death. However, neither a Will nor a gift inter vivos fully offers a balanced combination of control, flexibility, and security — a gap that the concept of a Trust seeks to address.

Trust Settlement: Can It Be a Balance or Safe Haven for Property Owners?

A Trust is an arrangement where one person holds legal title to property for the benefit of another. It is also defined as a legal arrangement through which a person (the Settlor) transfers property to another person or entity (the Trustee) to hold and manage for the benefit of designated persons (the Beneficiaries). Legal ownership rests with the Trustee, while the beneficial interest belongs to the Beneficiaries. For a Trust to be valid, it must meet the three certainties of intention, subject matter, and object.

Trusts in Nigeria are broadly classified into Private Trusts, Corporate Trusts, and Public Trusts. A Private Trust is the most commonly used instrument in estate planning — a fiduciary arrangement in which an individual (the settlor) transfers property, whether tangible or intangible, to a trustee, who is entrusted with managing and administering that property for the benefit of specified beneficiaries in accordance with the terms outlined in a trust deed. A Private Trust may be established during the lifetime of the settlor (an inter vivos trust) or may take effect upon the settlor's death when created under a will (a testamentary trust).

Some quick distinctive characteristics: a Trust ensures continuous management of property by trustees both during the settlor's lifetime and after death, whereas a Will and a Deed of Gift do not provide for ongoing management. The settlor transfers legal ownership to the trustee while retaining a degree of control, whereas a testator under a Will keeps full ownership until death, and a donor under a Deed of Gift relinquishes ownership immediately. A Trust begins to operate during the settlor's lifetime and continues after death, whereas a Will only operates after the testator's death, and a Deed of Gift completes the transfer at the time of execution. Beneficiaries of a Trust can enjoy their beneficial interest both during and after the settlor's lifetime, whereas beneficiaries under a Will obtain their legal interest only upon the testator's death.

These distinctions highlight the strengths of a Trust settlement compared with a Will or a Deed of Gift. A Trust settlement may therefore be regarded as a balanced estate planning tool for property owners who desire to retain control over their assets during their lifetime, secure protection in the event of incapacity, and ensure continued management of their properties after death.

Having established that a Trust settlement offers control, protection, and continuity, the further issue is whether it can be considered a true 'safe haven' — a permanent and universally suitable option for all property owners. While a Trust settlement can provide balance, it may not always automatically constitute a safe haven for every property owner. Estate planning ultimately depends on the intentions, objectives, and personal circumstances of each property owner. For instance, a property owner who intends to transfer ownership outrightly and irrevocably to a beneficiary during his lifetime may find a Deed of Gift more suitable than either a Will or a Trust settlement. For that property owner, the safe haven will not be a Trust settlement or a Will, but a Deed of Gift.

Conclusion

Estate planning tools are not a one-size-fits-all exercise but a strategic process that must align with the unique intentions and circumstances of each property owner. While a Will and a Deed of Gift serve important legal purposes, they each possess inherent limitations. A Trust settlement, by contrast, offers a more balanced approach through its combination of control, protection, and continuity. However, despite its advantages, a Trust settlement cannot be regarded as a universal safe haven — the suitability of any estate planning tool ultimately depends on the specific objectives of the property owner.