How Can I Create a Property Trust in Ogun State?
Introduction
In recent years, property owners in Nigeria — particularly in Ogun State — have become increasingly aware of the importance of estate planning and legal protection for their real estate investments. Many have built homes, acquired farmlands, and developed commercial estates, yet only a few have taken the extra step to secure these properties through a legal trust structure. A property trust is one of the most effective ways to ensure that your real estate assets are properly managed, protected, and transferred according to your wishes, even after your death.
Establishing a Property Trust in Ogun State helps you control how your property is used, who benefits from it, and how it is transferred from one generation to another — all under the supervision of a legal framework. It eliminates family conflicts, prevents property mismanagement, and ensures that your estate plan stands the test of time.
This comprehensive article explains what a property trust is, the types of property trusts recognized under Nigerian law, the steps to create one in Ogun State, the legal documentation required, the roles of trustees and beneficiaries, and the tax implications. Whether you’re a private homeowner, a business owner, or a real estate investor, understanding the process of setting up a property trust will help you preserve your wealth and ensure your property legacy continues.
1. Understanding the Concept of a Property Trust
A Property Trust is a legal arrangement in which one party (called the Settlor) transfers ownership of a property to another party (the Trustee) to hold and manage it for the benefit of a third party (the Beneficiary) according to specified terms.
In simpler terms, you (the owner) hand over your property to someone you trust, who then manages it for the benefit of your children, family members, or any person or entity you designate.
This structure is widely used to manage wealth, prevent disputes, and ensure smooth property succession. Under Nigerian law, particularly the Trustee Law of Ogun State, the creation and administration of trusts are recognized and enforceable by the courts.
2. Legal Framework Governing Property Trusts in Ogun State
Property trusts in Ogun State are primarily regulated by the following legal instruments:
The Trustee Law of Ogun State (Cap T9, Laws of Ogun State).
The Land Use Act of 1978 (vesting all land in the Governor).
The Conveyancing Act of 1881 (as applicable to Nigeria).
The Trustee Investments Act, Cap T22 LFN 2004.
The Administration of Estates Law of Ogun State.
These laws collectively define how trusts are created, the duties of trustees, the rights of beneficiaries, and how property titles can be transferred and registered under trust.
3. Why You Should Create a Property Trust in Ogun State
Creating a property trust is a forward-thinking legal decision that offers numerous advantages:
Family Protection: Prevents family disputes and property battles after death.
Succession Planning: Ensures your property passes to your chosen heirs smoothly.
Asset Management: Enables professional management of properties.
Privacy: Keeps your estate plan private and out of probate court.
Protection from Creditors: Shields your assets from claims and liabilities.
Continuity: Ensures properties remain intact for future generations.
Tax Efficiency: May help reduce certain estate taxes or government fees.
In Ogun State, where property ownership is expanding rapidly, a properly executed trust can safeguard real estate assets from unnecessary risks or conflicts.
4. Key Parties in a Property Trust
Settlor: The property owner who creates the trust.
Trustee: The person or institution legally responsible for managing the property on behalf of the beneficiaries.
Beneficiary: The person(s) or entity entitled to enjoy the benefits of the property (e.g., rent, proceeds, or occupation).
Protector (optional): A person appointed to supervise the trustees and ensure they act according to the settlor’s wishes.
Each role must be clearly defined in the Trust Deed, which is the main document that governs the trust relationship.
5. Types of Property Trusts in Ogun State
There are several forms of property trusts recognized in Nigeria, each designed to serve different objectives:
Living (Inter-Vivos) Trust: Created while the settlor is still alive.
Testamentary Trust: Created through a will and takes effect after death.
Fixed Trust: The beneficiaries and their shares are clearly defined.
Discretionary Trust: The trustee decides how and when beneficiaries receive benefits.
Charitable Trust: Created for public or charitable purposes (e.g., schools, orphanages).
Family Trust: Designed to protect family assets and ensure inheritance continuity.
Land or Real Property Trust: Specifically created to hold and manage land or buildings.
In Ogun State, most individuals and families prefer Family Property Trusts or Real Estate Investment Trusts (REITs) for asset management and succession.
6. Steps to Create a Property Trust in Ogun State
Creating a trust involves several deliberate and legally recognized steps. Below is the step-by-step procedure for establishing a property trust in Ogun State.
Step 1: Define Your Trust Objectives
Ask yourself:
What do I want to achieve with this trust?
Who will benefit from it?
How long should it last?
Typical objectives include providing for children, managing income properties, or preserving family wealth across generations.
Step 2: Consult a Property and Trust Lawyer
Engage an experienced property lawyer or trust law specialist. The lawyer will:
Advise you on the most suitable type of trust.
Draft the Trust Deed.
Ensure compliance with Ogun State property laws.
Handle registration at the appropriate Land Registry.
Step 3: Select Your Trustees
Choose trustworthy individuals or institutions with integrity, good judgment, and financial discipline.
You may appoint:
Individuals (family members, lawyers, or professionals).
Corporate trustees (e.g., banks, trust companies).
Under Ogun State law, it is advisable to have at least two trustees to ensure checks and balance.
Step 4: Identify and List the Beneficiaries
These are the people or entities who will benefit from the trust property. Clearly define:
Their names.
The nature of their benefits (rent, profit, use of the property, etc.).
Any conditions for disbursement.
Ambiguity in this section can lead to future disputes.
Step 5: Draft the Trust Deed
The Trust Deed is the most critical document. It sets out:
The Settlor’s declaration of intent to create the trust.
The powers and duties of trustees.
How the property will be managed.
How income or benefits will be distributed.
The duration or termination conditions of the trust.
It must be drafted by a qualified lawyer and executed under seal.
Step 6: Transfer Property Ownership to the Trustees
This step is legally known as vesting the property in the trustees.
The Settlor transfers ownership of the property to the trustees via:
A Deed of Assignment, or
A Deed of Settlement, or
A Deed of Gift.
The transfer must be registered at the Ogun State Land Registry to give it legal effect.
Step 7: Stamp and Register the Trust Deed
After execution, the Trust Deed must be:
Stamped at the Stamp Duties Office to make it admissible in court.
Registered at the Ogun State Land Registry (for property-based trusts).
This ensures that the trust is recognized under Ogun State law and that ownership records reflect the trustees as the legal title holders.
Step 8: Obtain Governor’s Consent (If Applicable)
Under the Land Use Act (1978), land ownership in Nigeria requires Governor’s Consent before transfer.
If the property being transferred into the trust already has a Certificate of Occupancy (C of O), the trustees must obtain Governor’s Consent before registration.
This step perfects the trust’s ownership status.
Step 9: Maintain and Administer the Trust
Once the trust is created, the trustees must:
Keep accurate records.
Manage the property in accordance with the trust deed.
Render periodic accounts to the beneficiaries or protector.
Failure to do so can lead to court intervention or removal of the trustee.
Step 10: Periodic Review and Amendment
The trust deed can include a clause allowing periodic review or amendment, especially for long-term family trusts.
Changes may involve adding new beneficiaries, substituting trustees, or modifying investment strategies.
7. Documents Required to Create a Property Trust
The following documents are essential for a valid property trust in Ogun State:
Draft Trust Deed.
Deed of Assignment or Deed of Gift.
Certificate of Occupancy (or land title document).
Tax Clearance Certificate of the Settlor.
Survey Plan and Building Plan Approval (if applicable).
Identification documents of trustees and beneficiaries.
Governor’s Consent (for titled properties).
Evidence of payment for Stamp Duties and Registration.
Your lawyer will prepare and file all these documents at the Land Registry.
8. Registration Process at Ogun State Land Registry
Submit the executed Trust Deed and transfer documents.
Pay the prescribed registration and consent fees.
Obtain an acknowledgment slip and tracking number.
The registry verifies documents for authenticity.
The Registrar endorses the trust, assigns a registration number, and records it in the land register.
Collect the Certified True Copy (CTC) after approval.
The entire process can take between 4 to 8 weeks, depending on the complexity and accuracy of the documents.
9. Legal Duties of Trustees
Under the Trustee Law of Ogun State, trustees are legally obligated to:
Act in good faith and with due diligence.
Manage the property prudently.
Keep accurate records and accounts.
Avoid conflicts of interest.
Distribute benefits as directed by the trust deed.
Seek court approval before making significant decisions not covered in the deed.
Trustees are fiduciaries — they must act in the best interest of the beneficiaries at all times.
10. Rights of Beneficiaries
Beneficiaries under a property trust have several legal rights:
The right to receive income or benefits as stipulated.
The right to inspect trust accounts.
The right to sue trustees for negligence or breach of duty.
The right to transfer or disclaim their beneficial interest.
These rights ensure transparency and accountability in trust administration.
11. Duration and Termination of a Property Trust
A property trust can be:
Fixed-term – lasting for a defined number of years.
Life-term – lasting during the settlor’s lifetime or that of a beneficiary.
Perpetual (Family Trusts) – designed to continue for future generations.
A trust can be terminated if:
The purpose is fulfilled.
All beneficiaries consent to dissolution.
The property is sold and proceeds distributed.
A court orders revocation due to fraud or impracticability.
12. Tax Implications of Property Trusts in Ogun State
While trusts offer asset protection, they are also subject to certain tax obligations:
Stamp Duties on the Trust Deed and transfer instruments.
Capital Gains Tax (10%) on property transferred into the trust.
Personal Income Tax (where beneficiaries earn income from the trust).
Annual Ground Rent or Land Use Charge, payable by the trustees.
Trustees must file annual tax returns with the Federal Inland Revenue Service (FIRS) and the Ogun State Internal Revenue Service (OGIRS).
13. Common Mistakes When Creating Property Trusts
Using unqualified or dishonest trustees.
Failing to register the trust deed.
Leaving out key property documents.
Poorly drafted clauses in the trust deed.
Failure to obtain Governor’s Consent.
Not updating the trust after major life changes.
Avoiding these mistakes ensures your trust remains legally valid and enforceable.
14. Advantages of a Registered Property Trust in Ogun State
Legally recognized ownership structure.
Easier estate administration after death.
Property protected from creditors and marital disputes.
Better inheritance management for minors.
Continuity of property usage and management.
Enhanced investment opportunities through professional trustees.
15. The Role of Lawyers and Corporate Trustees
Creating a property trust requires expert guidance. Property and trust lawyers draft and register the documents, while corporate trustees (like banks or professional trust companies) manage the property.
Chaman Law Firm, for example, offers full-service trust creation, registration, and administration in Ogun and Lagos States.
16. Sample Structure of a Trust Deed (Simplified)
Title: Deed of Settlement/Declaration of Trust.
Date: The date of execution.
Parties: Settlor and Trustees.
Recitals: Background information on ownership.
Declaration Clause: Intention to create the trust.
Trust Property Description: Details of land or property.
Powers of Trustees: Management and investment rights.
Beneficiaries: Names and entitlement terms.
Duration: Term or perpetual clause.
Revocation Clause: Conditions for amendment.
Execution: Signatures, witnesses, and seal.
17. Duration for Completing the Entire Process
On average, creating and registering a property trust in Ogun State takes between 8 to 12 weeks, depending on:
Number of properties involved.
Speed of Governor’s Consent.
Volume of supporting documents.
18. Practical Example
Mr. Adewale, a real estate investor in Arepo, owns multiple duplexes. He creates a Family Property Trust transferring ownership to two trustees (a lawyer and his brother) for the benefit of his three children. The trustees collect rent, maintain the properties, and use the income to fund the children’s education. Upon Mr. Adewale’s death, the trust continues seamlessly without probate or family dispute.
19. Court Intervention in Trust Matters
If disputes arise, the High Court of Ogun State has jurisdiction to:
Remove or replace trustees.
Interpret trust terms.
Enforce beneficiaries’ rights.
Approve amendments or dissolution.
20. Modern Trends in Property Trusts
Nigeria is witnessing growing adoption of digital and corporate trust structures, especially among wealthy families and investors. Corporate trustees such as banks and law firms are now offering real estate trust management services, ensuring transparency and professional administration.
Conclusion
Creating a Property Trust in Ogun State is one of the wisest legal steps any property owner can take to preserve, manage, and transfer real estate assets securely. It prevents family disputes, simplifies succession, and ensures that your hard-earned properties continue to serve your chosen beneficiaries long after you’re gone.
By following the proper legal process — engaging a property lawyer, drafting a valid Trust Deed, registering it, and appointing reliable trustees — you establish a structure that safeguards your property and guarantees lasting peace of mind.
At Chaman Law Firm, we specialize in setting up property and family trusts, drafting deeds, registering them at the Ogun State Land Registry, and managing them professionally for clients both in Nigeria and the diaspora.
Call to Action
Would you like to create a legally recognized Property Trust in Ogun State?
Let professionals guide you through every step.
Chaman Law Firm 115, Obafemi Awolowo Way, Allen Junction, Beside Lagos Airport Hotel, Ikeja, Lagos 📞 0806 555 3671, 08096888818,