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Why next of kin can’t access funds after account owners’ death – Lawyer gives reasons

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Muhammed Adam

Lagos-based legal practitioner and Principal/Founder, Muhammed Adam & Associates, Muhammed Adam, speaks to VICTORIA EDEME on issues associated with writing a will

Can you explain the importance of having a will?

There are so many advantages to having a will. It is important for everyone, particularly those with assets in different parts of the country or worldwide. It becomes important for the person to take inventory of all their assets. Experience has shown that many people acquire property without a will, their family members do not know what they own while they are alive. So, a will helps the testator, the maker of the will, take proper inventory of their assets.

Under native law and custom, you can’t give your property to people who are not related to you. However, when you desire to give your property to non-relatives, a will can help you do so. Due to the nature of conflicts that have arisen in the past over the distribution of assets, the making of the will can easily resolve such disputes because it (a will) states who is to get what and what should be given to whom. In Nigeria, there are some native laws and customs that apply to inheritance. With the making of the will, there is a limit to which these native laws can apply to the distribution of assets. In some parts of Nigeria, women do not inherit property, or the first child is limited to certain properties. However, the making of the will reduces the impact of customary law on some of these assets.

What are the key components that should be included in a will?

There are four key components in a will. Firstly, a will must identify the testator i.e. the maker of the will and owner of the assets. The will must contain the full name, address, and age of the testator. Secondly, a will must clearly show who the executors are. Executors are people who will administer the will when the testator is no longer alive. Their names and addresses must be stated. Another important component of the will is the details of the beneficiaries. The beneficiaries are people who will inherit the properties of the testator after death. Also, the details of the property belonging to the testator must be stated in the will.

The testator must also state properties that do not belong to them. For example, you may entrust your property to my care as a lawyer. So when I’m writing my will, I need to state who such property belongs to. There is a saying that ‘you cannot give what you don’t have’. If a property does not belong to the testator, he cannot will it out. Also, the signature of the testator is very important because it validates the making of the will. A will without the testator’s signature is as good as a worthless piece of paper. The law requires that the signature must be in the presence of witnesses. If the witnesses are not present when the testator is signing the will, that will is not valid. These are the important components of a proper will.

Are there any legal requirements or formalities that must be met when drafting a will?

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One of the requirements of a will is that it must be in writing. A will cannot be in oral form. The age of the testator is also a legal requirement. Under the law, you cannot make a will when you’re less than 18 because you’d be considered a minor. Even though a minor can acquire a property, a minor cannot give out a property. Signatures of the testator and witnesses are legal requirements. The date is also a legal requirement because a will is ambulatory, as it takes effect after the death of the testator. It is valid when the date of the will precedes the date of death. But if the date of death precedes the date of the will, it is invalid.

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What happens if someone dies without a will?

When someone dies without a will, the person is said to have died intestate. But when someone dies with a will, the person is said to have died testate. If someone dies without a will, their property is subject to the estate law of their state of residence. The will subdues the effect of customary law and Islamic law. For example, if the person who dies without a will is a Muslim, the Islamic personal law will be fully activated. If the person is subject to native laws and customs, the customary law of that person will be fully activated.

Does this mean that the will supersedes customary and religious laws?

It supersedes them to the extent that it allows the testator to decide on how to distribute their properties and to also give people who are not related to them. Under Islamic law and customary law, there is a list of people that you can only give your properties to. There is an order that you must follow. There is a percentage that you must give to your child, father, daughter, mother, or surviving spouse under native law and custom. For instance, when a man is subject to customary law, and the person dies, the first child is the only child entitled to live on the property that the man was living on when he was alive. If he dies intestate, the customary law will be fully activated.

If the person is neither a Muslim nor someone subject to customary law, what applies is the administration of the estate law of that state. If the person is married under the statute, i.e. when they did the marriage in a registry or a licensed place of worship, certain people would apply for a letter of administration. So, the person that is number one, for instance in Lagos State, under the administration of its estate law is the surviving spouse, followed by the children, mother of the deceased, father of the deceased, uncle of the deceased, brothers, and so on. But the point is that if someone dies without a will, you apply for letters of administration. The letter of administration is a document that allows a third party to administer the estate of a deceased person.

The letter of administration can only be given to at least two people. The people that can apply for it are the surviving spouse and the children. If the surviving spouse is not alive, then the children, at least two of them who are above 18 years, can apply. If there is nobody like that, then it goes down to the mother of the deceased and so on. To enable those survivors to transfer or acquire those properties, they must get a letter of administration. Otherwise, they will not be able to get it. And this includes having access to bank accounts, having access to the pension, cooperatives, shares in companies, and all of that. A letter of administration is an important document that must be obtained when someone dies without a will and they have properties in their name.

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How do the next of kin of account holders and pensionable workers get access to the accounts once the holder dies?

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By law, a next of kin is someone who is required for information purposes only, i.e. someone who can be reached immediately if the account holders are unreachable. Being a next of kin, however, does not confer a legal right to acquire property or to have access to property or assets, money in an account, pension, and all of that. The obligation of the next of kin is to be able to bring the death of the account holder to the attention of the bank or to the attention of someone who holds the money so that they can recognise whoever comes forward as the owner of the letter of administration. I’ll give you an example. Let’s say you are my next of kin, and I have N20m in a bank. If I die today, your obligation by law is to only inform the bank that this person is no more. The bank will not transfer the money to you because you are just for information purposes.

In a real-life case that I was involved in, a woman was named as next of kin to a successful businessman, who was her husband. She wrote the bank to give her the money in her husband’s account because she’s the next of kin. The bank refused and she went to court. We argued before the court that the fact that she’s the next of kin does not mean that she’s automatically entitled to the money. By law, she still requires a letter of administration to be able to have access to the money. The advantage is that the next of kin may be someone who is disqualified by law from applying for a letter of administration. I’ll give you an example.

If a man now names his friend as next of kin, the friend does not have power, access, or rights to his money and he cannot apply for the letter of administration. But when there is a will, that will should automatically tell you who the money in the account is going to. The bank will work with what the will says concerning who will now have access to the account. But when there’s no will, it will work with the letter of administration. So to ensure that the transfer of wealth is moved to the next of kin, that account holder must have a will that states such.

Can you clarify the role of executors and how they are appointed in the will?

The role of the executor is the role of the administrator. He is the person who will assist the beneficiaries in getting the properties to them. For instance, if you name me as the beneficiary of your will, after death, the administrators need to transfer the property to me. There’s a document that the administrators must give to me as the beneficiary. That document is called assent. It’s only the executors who can issue that document. Before the administrators or the executors can issue assent to me, they must also apply to the probate registry of the High Court of the state to get probate. A document issued to executors or administrators to be able to administer a will is called probate. After the probate has been given by the probate registrar, it is their role again to now issue documents called assent so that the beneficiary can have access to the property. How executors are appointed is at the discretion of the testator. There is no special procedure to it.

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Can an executor be a beneficiary too?

As a general rule, no. The reason behind that general rule is so that there is no conflict of interest between being a beneficiary and being an executor. If you are an executor and a beneficiary at the same time, you may want to favour yourself more than other beneficiaries, or you may want to administer the assent faster towards getting the property compared to when you are not an executor and a beneficiary. But the testator, maybe because of their relationship, may name an executor as a beneficiary. For instance, if you name your spouse an executor of your estate, ordinarily that person is supposed to benefit from your estate, even without being an executor. So such a person can be named beneficiary and executor at the same time.

In an instance where the executor is not a beneficiary, what are the benefits that the executor will get?

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One of the provisions for executors is how they will be paid. The testator will make provision for how the executors will be paid. If I make a will, and I appoint you as my executor, I may say that the sum of N5m should be paid to you every month during the administration of the estate. That way, you are not benefiting as a beneficiary now. You are being paid for your professional engagement. A lawyer can be an executor. If you name me as an executor in your will, and I’m being paid my professional fee for being an executor, I can’t be said to be a beneficiary of the will.

What options are available for distributing assets if the beneficiary dies before the testator?

If the beneficiary dies before the testator, such assets can go back to the estate. There is something called residual estate, which constitutes undistributed property. In some instances, it can be re-willed to another person, or to the survivor of that beneficiary. If the testator is still alive, he can use his discretion to change whatever he or she wants to change. But normally what happens in this instance is that the property will be re-willed to another person or the survivor of the beneficiary.

How often should a will be updated or reviewed?

A will should be updated if there is any change in your financial situation. It can be when you have a new child, you get married, a beneficiary dies, an executor dies, or there is a change in personal relationship. For instance, I have a son and I’ve made my will. If tomorrow I have another child, I will update my will. A codicil is an amendment made to a will. So you can have an original will and as many wills as possible. But the wiser thing to do is that if there’s a change in financial situation or family relationship, you update your will. (PUNCH)

 

 

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More pressures on pockets as food inflation rises to 40%

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More pressures on pockets as food inflation rises to 40%
•High electricity tariff to drive further rise — Analysts

•It’s bad for businesses – NACCIMA •Small businesses to lose capital base— ASBON

At the backdrop of sustained rise in prices of staple food items in the market, Nigeria has recorded an unprecedented food inflation rate of 40 percent in March 2024.

Economists and financial analysts explained that the development would put more pressure on the purchasing power of average Nigerian and they also predict that the trend will continue for some months before stabilising.

The food inflation drove the headline inflation rate to 33.2 percent, up from 31.7 percent recorded in the month of February.

The figures released yesterday by National Bureau of Statistics, NBS, in its Consumer Price Index, CPI, report for March 2024, represented a 2.09 and 1.5 percentage percentage points increases month-on-month.

But the analysts see a wider headline inflationary rise in this month to 34.6 percent, representing a 2.4 percentage month-on-month rise resulting from the recent hike in electricity tariff.

Electricity tariff hike to drive further inflation – CardinalStone

Analysts at CardinalStone Finance Limited, a Lagos based investment house, indicated that further inflationary upswing should be expected following the recent drastic hike in electricity tariff.

They stated: ‘’The inflation outlook is biased to the upside, a consequence of the recent implementation of a new electricity tariff. For context, the Nigerian Electricity Regulatory Commission (NERC) have hiked price for Band A customer from N68 to N225 per kilowatt hour.

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‘’Nevertheless, we see some downside risk from the recent currency sustainability. ‘’Overall, we project inflation to print 34.6% in April 2024.’’

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Further rise will be slower – Alpha Morgan

In the meantime, analysts at Alpha Morgan Capital said: “From our analysis, we project that inflation will further increase but at a continuously slower rate. We tie this prediction primarily to the recent monetary interventions by the Central Bank of Nigeria in mopping up excess liquidity, curbing volatile exchange rate movement through various aggressive currency interventions, government fiscal policies, such as agricultural interventions, among others.”

Devpt is bad for businesses – NACCIMA

Meanwhile, OPS said that the persistent rising inflation could sound the death knell for small businesses in the country, with consequential loss of jobs and worsened insecurity.

Commenting, Director General of the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA), Sola Obadimu, said: “Persistent rising inflation is bad for business as well as for individuals.

“It erodes income in value terms and purchasing power becomes weaker for both individuals and businesses. Inventories will continue to grow.

“It is bad for planning purposes and breeds growing uncertainty. Cost of doing business continues to grow leading to higher cost of goods. It’s cyclical.

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“Even when businesses or individuals tend to earn higher income, the value (in real terms) becomes lower.”

In his reaction, President of Association of Small Business Owners of Nigeria (ASBON), Dr Femi Egbesola, said the development will worsen survival of small businesses.

He stated: “The new and rising inflation rate, affecting largely food, essential commodities, raw materials, electricity and alternative power generation, transportation among others, will continue to worsen the survival and growth of SMEs.

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It will, no doubt, squeeze out the meager working capital of SMEs and make us more vulnerable to extinction.

“Not all costs can be passed to the consumers but even at that, certain costs will be passed onto them, and since they also have had their disposable income eroded by inflation, sales of goods and services of SMEs will drastically drop. For an average citizen, their standard of living and welfare will significantly drop too.

“More Nigerians will suffer from hunger, and lack of access to basic necessities and amenities, worse of it is health and medical needs.

“Overall, the implications of this on SMEs is that many more businesses will die off and become ailing, job losses will increase as many more businesses will lay off workers.

“There will be an increase in bad loans as more SMEs will be unable to fulfill their loan obligations leading to decreased access to funding from banks that will be more averse to lending to SMEs particularly with the increased interest rate, now coupled with inflation.

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“More insecurity will prevail in the land for many will look for alternative illegal ways of survival. More will migrate in the name of Japa.

“The extinction of more businesses will open doors for imported products to take their space which eventually will also stress the Naira exchange rate.”

In its CPI report NBS stated: “In March 2024, the headline inflation rate increased to 33.2 percent relative to the February 2024  headline inflation rate which was 31.7 percent .

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“On a YoY basis, the headline inflation rate was 11.16 percentage points higher compared to  the rate recorded in March 2023, which was 22.04 percent.

On food inflation the bureau said: “The food inflation rate in March 2024 was 40.01 percent on a year-on-year basis, which was 15.56 percentage points higher compared to the rate recorded in March 2023 (24.45 percent).

“The rise in Food inflation on a year-on-year basis was caused by increases in prices of the following items garri, millet, akpu uncooked fermented (which are under the bread and cereals class), yam tuber, water yam (under potatoes, yam, and other tubers class), dried fish sadine, mudfish dried (under Fish class), palm oil, vegetable oil (under Oil and Fat), beef feet, beef head, liver (under Meat class), coconut, water melon (under Fruit Class), Lipton tea, Bournvita, Milo (under coffee, tea and cocoa class).” (Vanguard)

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N20, N10, N5 rendered ‘irrelevant’ as inflation bites harder

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N20, N10, N5 rendered ‘irrelevant’ as inflation bites harder
Naira

Across major markets, prices of goods are moving away from the lower denomination of the Naira currencies as inflation bites harder.

Not too long ago, a sachet of pure water cost N5.

However, in the past couple of years, these notes have struggled to get items they could be attached to.

A market survey by DAILY POST showed that more than half of Nigeria’s legal tenders cannot make purchases.

Despite this, the Central Bank of Nigeria, CBN, recognizes the following denominations; 50 kobo, N1 and N2 which are coins, and N5, N10, N20 and N50 which are printed on polymer materials.

A sachet of pure water now sells for N30. Retailed sugar no longer sells for N10, while candies like Tom Tom are retailed at two pieces for N50. To further compound the woes of these notes, goods are now rounded up to 50 or 100, which further makes these currencies irrelevant.

In the past six months, the Naira has depreciated considerably. At one point, it was about N1,900 to a single dollar until the intervention by the CBN with the naira now trading at about N1050 to a dollar.

The implication of it is that N1000, which is Nigeria’s highest denomination, is less than a single dollar.

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Anyone with $1000 is a millionaire in naira based on the current exchange rate, and anyone with $1 has more than N1,000.

Despite the recent surge in the value of naira, prices of commodities have not shown any significant signs of climbing down.

Experts believe that Nigeria’s inflation is a product of many factors, with FX being one of the numerous factors.

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But despite this, the Nigerian government is still printing some of the lower denomination currencies at a huge cost.

According to reports, in 2016, CBN had to temporarily halt the printing of N5, 10, N20 and N50 due to the cost of production.

The report said it costs N1000 to print each lower denomination because Nigeria Security Printing and Minting plc (NSPM) is unable to print on polymer.

Now experts are calling on the CBN to discontinue the printing of the lower denominations and review the currencies in line with realities.

Abiodun Ayangbemi, an economist, emphasised that the CBN must discontinue the printing of the lower denomination because the majority of those currencies have failed the basic principles of money— means of exchange and store of value.

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“The monetary authorities cannot continue to print those denominations when there is basically nothing to use them for,” he said.

Lekan Olaleye, a monetary policy expert, asked the federal government to take a copy of the re-denomination policy adopted by Ghana some years back.

He argued that the CBN should remove two zeros from the existing notes.

It would be recalled that Ghana had in 2007, re-denominated the Cedis by striking out four zeros from their currency and producing the new Ghana Cedis.

A former CBN Governor, Sanusi Lamido had in 2012 announced a plan to introduce N5000 notes. In the same vein, there was also a plan to coin the lower bank notes of N5, N10 and N20.

However, the policy was met with a strong outcry from the public, who condemned the plan. Thus, the government shelved the plan.

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Years after the botched plan, prices of goods and services have spiked beyond the 2012 level. (Daily Post)

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We’re not aware of Ganduje’s suspension – Kano APC Chairman

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Ganduje, wife, son to be arraigned before Kano court April 17
APC National Chairman and former Governor of Kano State, Abdullahi Ganduje

The Ganduje ward executives of the All Progressive Congress (APC) in Kano State, have denied the reported suspension of APC National Chairman, Dr Abdullahi-Umar Ganduje.

The ward executives made the denial while briefing journalist at the APC State Secretariat, on Monday in Kano.

According to the ward Chairman, Malam Ahmad Ganduje, those purported to have announced the suspension were not members of the party.

He said they were solemnly behind the APC national chairman and have confidence in his style of leadership.

The ward chairman added that they had passed a vote of confidence on Ganduje, and urged all party members in the ward and across the state to remain calm and law abiding.

In his remarks, the APC Chairman, Dawakin Tofa Local Government Area, Alhaji Inusa Dawanau, said the party will take legal action against those the “impersonators”, who announced Ganduje’s suspension.

The News Agency of Nigeria (NAN) reports that, Malam Haladu Gwanjo, who claimed to be the Legal Adviser of APC in Ganduje Ward, had earlier announced the purported suspension of party’s national chairman.
Gwanjo, who cited alleged corruption and other vices as reasons for the suspension, said that the decision was taken by nine executive members of party in Ganduje ward.(NAN)

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