What Does It Actually Cost?

The largest single professional fee at setup is typically the cost of drafting the trust instrument. This is not a template fee. It is a bespoke engagement in which specialist counsel works through the settlor's intentions, the structure of the family, the nature of the assets, and the contingencies the trust must anticipate across its projected lifetime.

Serious drafting work is iterative. A first draft produces questions. The questions produce revisions. The revisions produce further questions. A trust that will hold for decades typically emerges from three to five rounds of drafting, each round reducing the ambiguity left in the instrument. The fee reflects this work, not merely the final document.

A settlor who is quoted a small fixed fee for trust drafting should treat the quote as a warning. A trust instrument drafted in a single sitting, from a template, without iterative engagement with the settlor's specific facts, is one of the failure modes the sub-pillar identifies. It is not a bargain. It is a liability priced to look inexpensive.

The rule of thumb: a reasonable drafting fee for a serious Nigerian family trust reflects a senior practitioner's time across multiple weeks of iterative work. If the fee cannot have produced that work, it cannot have produced that instrument.

Stamp duty is payable on a trust instrument as on any other instrument creating a legal interest in property. It is charged under the Stamp Duties Act at rates prescribed by the Federal Government, and is paid to the Federal Inland Revenue Service. The duty is moderate relative to the other costs of setup, but it is statutory — it must be paid, and the instrument is not properly stamped until it is.

An unstamped trust instrument is not void, but it is inadmissible in evidence until the duty is paid. A settlor whose instrument was never properly stamped will discover the omission only when the instrument is produced in court or before a regulator, at which point the duty — and penalties for late payment — become due all at once. This is why competent counsel pay stamp duty as part of setup, not as an afterthought.

Under the Land Use Act, any transfer of rights in land subject to a Certificate of Occupancy requires the consent of the state governor where the land is located. This consent is administrative, but it is not automatic, and it is not free. The fees vary by state, and in Lagos in particular the combined cost of consent, registration, and related charges can be a significant component of the total.

For a settlor whose trust is designed to hold multiple properties, the governor's consent cost is often the single largest expense of funding the trust — larger than the drafting fee, larger than the stamp duty, larger than the trustee's first-year compensation. A trust plan that does not budget for governor's consent at the outset is a plan that is likely to stall at the funding stage.

The temptation, at this point, is to defer the land transfers and settle only the easier assets — shares, cash, investments. This is a mistake. A trust that holds only liquid assets leaves the land in the settlor's personal estate, where it remains exposed to probate, creditor claims, and every other risk the trust was meant to prevent. The governor's consent cost is not avoided by deferral. It is transferred to the next generation in the form of lost protection.

Where assets transferred into trust are assets that would trigger capital gains tax if disposed of — land, shares, and certain other capital assets — the transfer to the trustee may be a taxable event under the Capital Gains Tax Act. The rate is prescribed by statute, and the tax is calculated on the gain realised on the transfer, measured against the original acquisition cost.

For assets held for many years and transferred into trust at current market value, the capital gain can be substantial — and the tax correspondingly material. This is a cost that frequently surprises settlors who have not been walked through the tax implications of funding their trust, and it is one of the reasons competent counsel engage a tax adviser as part of setup rather than leaving the tax analysis to chance.

Specific exemptions and reliefs exist, and whether a particular transfer triggers capital gains tax — and at what effective rate — depends on the facts. The general rule: assume the tax applies; verify with a specialist; budget for it unless the specialist confirms an exemption. A settlor who assumes no tax is due, and is later assessed for it, will find the assessment landed on personal exposure rather than on the trust.

Once the governor's consent is obtained and any tax is paid, the transfer must be registered. The Land Registry in each state charges a fee for registration of the deed of assignment reflecting the transfer from the settlor to the trustee. The registrars of the relevant company share registers charge fees for updating the register to reflect the trustee as the new shareholder. Each of these is moderate on its own; together, across a trust of meaningful scale, they add up.

These administrative fees are not negotiable and are not avoidable — they are the cost of making the transfer visible on the public records that will be consulted in every subsequent transaction, audit, or dispute. A trust whose transfers are executed but not registered is a trust that has paid its taxes but has not completed its work. The cost is the final step of funding, not an optional flourish.

Not every trust requires formal registration. A private family trust operating on the basis of its deed alone, without taking a corporate form, does not incur registration fees at the CAC or SEC. For such a trust, this cost component is zero.

For a trust taking the form of an incorporated trustee under CAMA 2020 — the structure commonly used for family foundations and certain long-term family trusts — registration with the Corporate Affairs Commission requires the payment of prescribed filing fees and the preparation of the necessary constitutional documents. The cost is moderate, but the procedural work is real, and counsel's time in preparing the application is a component of the total.

For a trust regulated by the Securities and Exchange Commission — unit trusts, REITs, and other regulated collective-investment vehicles — the registration fees are more substantial, reflecting the scale of the regulatory obligation the structure is assuming. These trusts are not in the scope of most Nigerian family settlors; they are the structures used by asset managers, developers, and public fundraisers.

A settlor considering the incorporated-trustee form should budget for registration as an additional cost over and above the private-trust baseline. The essay on the CAMA incorporated trustee, elsewhere in this sub-cluster, treats the choice in detail.

The trustee's compensation is the only cost that continues throughout the life of the trust. All the other costs are paid once at setup. Trustee fees recur annually, and over the lifetime of a multi-decade trust, they are often the largest cumulative cost the structure carries.

The structure varies sharply by trustee type. An individual trustee — a family member or trusted friend — typically serves without fee or for a nominal annual reimbursement. A professional trustee — a senior lawyer or accountant — charges on an hourly or fixed annual basis, reflecting the time they expect to devote to the administration. A corporate trustee — a licensed institution — charges on a scale typically expressed as a percentage of assets under administration, with a floor that makes the institution uneconomic for very small trusts.

The trade-off is addressed in the main cluster essay on choosing a trustee. The cost point here: a settlor considering a corporate trustee should expect the first-year fee to include a setup element — the work of onboarding the trust — in addition to the recurring annual fee. These are two distinct charges, and the settlor should ask for both to be quoted explicitly.

The rule of thumb: trustee fees at the corporate level are typically calibrated so that over a multi-decade lifetime the total fee is substantial but proportionate to the scale of the assets the institution is administering. A trustee fee that appears very low is often the signal of a trustee whose administration will match its fee — superficial. A fee that appears disproportionately high is a signal to negotiate.

A bundled quote — a single flat fee for everything — is either understating what the settlor will actually end up paying, or concealing the allocation of cost between legitimate professional work and statutory duties that cannot be negotiated.

Counsel has no control over any of them. A quote that understates these — or that fails to include them altogether — is setting the settlor up for a surprise when the actual payments become due.

The fee should reflect a senior practitioner's sustained engagement, not a junior's template. Counsel who cannot explain the specific drafting work their fee covers is counsel who has probably not done that work.

The settlor needs to know what the annual trustee fee will be, what the annual compliance cost will be, and how those costs are calculated. A quote silent on year two is a quote designed to get the settlor past the first signature; the real cost begins after.

Many trust practitioners are not equipped to handle these without a tax adviser's support. A quote that assumes the settlor will arrange their own tax advice separately may be legitimate if it says so; one that is silent on tax implications altogether is one that will shift the tax burden onto the settlor at an uncomfortable moment.