Why ATM, bank passwords won’t secure inherited wealth – FCMB Trustees MD

The Managing Director of FCMB Trustees Limited, Rita Imonieroh, has said that knowing a deceased person’s bank passwords or having access to their ATM cards is no substitute for a valid will or trust because it offers no legal protection.

Imonieroh warned that families can lose access to assets after the death of a loved one without proper estate planning.

Speaking on the latest edition of the Drinks and Mics podcast hosted by Ugo Obi-Chukwu, Imonieroh said many Nigerians spend decades building wealth but fail to put structures in place to ensure their assets are protected and transferred smoothly to beneficiaries after death.

According to her, estate planning is the critical bridge between wealth creation and wealth preservation.

What they are saying

Responding to a question on why individuals need trusts or wills when they can simply invest in assets such as Microsoft or Amazon shares, Imonieroh said the primary purpose of estate planning is to ensure that loved ones continue to benefit from the wealth accumulated over a lifetime.

• “You spend your lifetime building so much. But after all of this is done, the question is, what’s next? If anything happens to you today, how would that wealth you’ve built be protected? How would you ensure it’s given to your loved ones? How would you ensure that your loved ones continue to live the life that you’ve built for them? That’s the mainstay of estate planning,” she said.

To illustrate the consequences of poor succession planning, she recounted the story of an uncle who died unexpectedly while on his way to work.

• “Until one day, she couldn’t again. She walked into the bank and told the teller. The teller said, ‘Madam, but this is not your account.’ She said, ‘Yes, it’s my husband’s account.’ Then the bank asked her to either come with her husband or come with a will,” Imonieroh recalled.

The widow was left struggling to meet everyday obligations, including school fees and rent.

• “So knowing or having access to account passwords is not enough,” she added.

More insights

The discussion also touched on the estate planning structures put in place by the late pop icon, Michael Jackson.

Jackson’s 2002 will transferred his assets into the Michael Jackson Family Trust for the benefit of his mother and children. Years later, a proposed $600 million deal involving the sale of part of his music catalogue sparked legal disputes within the family.

Using the case as an example, Imonieroh explained that the administration of a trust is guided entirely by the trust deed established by the settlor—the individual who creates the trust.

• “Whatever happens in a trust depends on what the settlor wants. There is a document called the trust deed that stipulates the powers, the instructions and the intentions of the settlor,”she said.

According to her, trustees are expected to manage assets strictly in line with those instructions and cannot arbitrarily enrich themselves through the administration of trust assets.

She added that in Nigeria, trustees typically earn only agreed trustee fees or a share of income generated from managed liquid assets.

Role of protectors and trustees

Imonieroh also clarified the distinction between trustees and protectors within a trust structure.

She explained that protectors serve as oversight figures whose role is to ensure trustees act in accordance with the trust deed and the wishes of the settlor.

Whether a trustee can be removed by beneficiaries, she noted, depends on the specific provisions contained in the trust deed. Some trust arrangements empower protectors or designated individuals to replace trustees after the settlor’s death.

What you should know

Estate planning professionals stress that wills and trusts are not exclusively for the wealthy.

Anyone with savings, investments, property, dependents or specific wishes regarding how their assets should be managed and distributed can benefit from having an estate plan.

Experts say the absence of a clear succession plan can leave families facing legal hurdles, delayed access to funds and uncertainty at a time when financial stability is often needed most. (Nairametrics)