Why entrepreneurs must take trust, will seriously—Makinde
Omobola Makinde is the MD/CEO of GTL Trustees Limited. She is a member of the Nigerian Bar Association and an associate of the Chartered Institute of Secretaries and Administrators of Nigeria. Makinde is also a member of the Society of Corporate Governance of Nigeria. She speaks about trust and will, and why entrepreneurs and other individuals must take them seriously.
Tell us a few things about your organisation?
GTL Trustees Limited was incorporated in 1991 but commenced operations in 2000 as Afribank Trustees and Securities Limited. It was then a subsidiary of the now defunct Afribank Nigeria Plc. Since the start of our operations, the company has had two name variations. The final evolution came in 2016 when Skye Bank Limited had to divest its holding in the Company in compliance with the directive of the CBN to all banks to divest from their non-core banking subsidiaries. This led to the sale of its ownership to a group of investors and the resultant change in name to GTL Trustees Ltd.
What trust and why is it so important for entrepreneurs?
A trust is an arrangement that enables a third party to hold assets on behalf of a beneficiary or beneficiaries. The person or institution that holds the assets is the trustee while the person that sets up the trust is called the settlor. The primary consideration of a settlor in a trust relationship is to make provision for the welfare and upkeep of the settlor’s intended and named beneficiaries. Setting up a trust helps in ensuring the confidentiality of the settlers’ wishes and also avoids undue cost which may be associated with other means of devolving assets to beneficiaries. A trust arrangement makes the assets easily and immediately available to the beneficiaries. In the converse, a trust may be set up solely to benefit the settler for instances of incapacitation.
What is the difference between a trust and a will?
The major difference between a trust and a will is that a will only takes effect after the demise of the testator (the person who made the will). Prior to the testator’s death, the will remains just a mere intention. Thus, no one has the authority to distribute the assets of a testator while the maker of the will is still alive. On the other hand, a trust becomes operational during the lifetime of the settlor and this is referred to as the living trust which is also a vital offering of the company.
Another difference between a trust and a will is that whereas a single person, group of people or an organisation can create the trust, only a single person can write a will. Once a trust is set up, there is deemed transfer of the titles of the settlor to the trustee which is the foundation of the fiduciary relationship between the settlor and the trustee.
What do you think Nigerians, including entrepreneurs, are not open to the idea of writing wills or even setting up trusts?
Well, most Nigerians do not want to think of their mortality and therefore when the issue is discussed, you hear such statements like ‘It is not my portion’ and you ask ‘then whose portion is it?’ Some would tell you that ‘yes, I know that I will die but not now’ as if they have a signed contract with death and they know when the contract would terminate.
The other inhibiting factor is that people are not comfortable divulging details of their assets and this makes it difficult or near impossible to set up a proper trust account for them. We understand this may be an offshoot of the deep-rooted culture and beliefs of Nigerians. However, this ideology needs to change. For us at GTL Trustees, we work to reassure our existing and potential clients that GTL Trustees is a highly regulated institution with strict rules against unauthorised information disclosure. We recognise the fiduciary responsibilities that exist between our clients and the company and would always ensure that we are guided and operate within the scope of those responsibilities.
Also, some people think that only those who have significant assets need to have a Will. This is not true because you need to preserve even the little you have for your loved ones. Interestingly, the provision of the Pension Reform Act, 2014, (as amended) requiring pension fund contributors or retirees accessing pension under the contributory pension scheme to have a will has further debunked the assertion that you need to have significant assets before writing your will. This has led to our RSA will offering.
You earlier mentioned that you help in preparing RSA wills. What is an RSA will?
RSA is an abbreviation for Retired Savings Account. An RSA will is our simple will offering that takes care of pension contributions and bank balances. The Pension Reform Act 2014 (as amended) implores all employees and contributors under the pension scheme to make a will so that beneficiaries of a deceased employee can easily access their pension contributions. The RSA will makes it easier for the beneficiaries listed under the will to have access to the funds in the RSA account in the event that the worker/pensioner dies. It is necessary to correct the notion often held by people that once you have named a certain individual as your ‘next of kin’ in the plan document, then the named individual is the beneficiary. It is important to know that the named ‘next of Kin” does not automatically become the beneficiary of a deceased person. You still need to have a will in which the beneficiaries are specifically listed.
At GTL Trustees Limited, we offer to draft the Simple RSA Will at a very affordable cost. However, where it is found that the client has more assets outside their RSA balances, we advise such clients on the need to have a Comprehensive Will that encompass all their assets and not just the balances in their RSA.
What offerings do you have for SMEs or those operating in the retail sector?
In making our professional capabilities available to customers on the retail end as well as working with clients to address specific financial pain-points, as initially mentioned, we help to prepare RSA wills for our individual clients in order to facilitate seamless transfer of their pension contributions to their named beneficiaries when they pass on. Other offerings targeted at our retail clients include some tailor-made offerings for individuals wishing to save for the education of their wards. Such products are: Education Investment Plan (EIP), Kiddies Investment Club (G-Kiddies) and GTL Investment Club (G-Sic).
Why should the general public patronize GTL Trustees?
For us at GTL Trustees, we believe that the taste of the pudding is in the eating. We render top-notch services to our clients and continually strive to add value to them through our offerings. We engage our clients and remain with them until their respective trust or wealth management objectives are achieved. We also have very tight rigorous compliance and risk processes aimed at ensuring that all assets under our custody are safe and secure.