Finance

TRUST AND OBEY: A guide to securing your child’s future


Trust is the bedrock of obedience. If you want someone to obey you, that person must trust that you would act in their best interest, one way or another. As a parent or guardian, how would you build that trust? How would you ensure that there is no doubt in the mind of your child/ward that you care and are fully deserving of their submission to your authority?

I recently heard someone say, “it is not what you leave to your children that counts, it is what you leave in them”. Education, whether formal or informal, is the best legacy that a parent can ever give to their child. Pulling all the stops to provide quality education is one sure way to give your children the confidence that you are dedicated to improving the quality of their lives and equip them for the future.

With the dilapidated state of public schools in Nigeria, many parents or guardians usually see the prospect of sending their children to foreign schools or (at the very least) private institutions as a more attractive option. However, quality education does not come cheap, and the costs of tuition at these schools may be discouraging for those who cannot afford all the accompanying fees. This is why it is imperative to have a system in place that slowly (but steadily) builds a strong financial foundation so that when the time comes for your children to advance to the next level of their education, you would be just as capable as you are willing.

An Education Trust Fund is a Trust established with the sole purpose of providing adequate financing for academic pursuits. The fund could be established by an individual or a group of persons depositing a sum of money or regular contributions into a Trust for the specified educational purpose.

The party depositing the funds in the Trust is called the Settlor, who stipulates the purpose the money is to be used for and any other conditions they desire regarding the Trust. The party who is benefiting from the Trust is called the Beneficiary, whose education is being sponsored from the Education Trust Fund set up by the Settlor. The Trust is managed and administered by a third party called a Trustee, whose duty is to prepare a Trust Deed that spells out the desires of the Settlor with respect to the Education Trust Fund.

The Trustee has several important responsibilities. It must consider the best interests of the Beneficiary while still ensuring that the wishes of the Settlor are fulfilled. Under no circumstances can a Trustee tamper with the Trust Fund or make any alterations without recourse to the Settlor; diverting funds would constitute a criminal offence. When formed for charitable purposes, an Education Trust Fund benefits a group of people or an educational institution such as a university, and may provide scholarships to less-privileged students.

The best time to settle an Education Trust Fund is before your first child is born, possibly even before you get married. This allows you to comfortably begin to put funds aside without the distractions of the other responsibilities that come with starting a family. That way, you can get a head start and build a substantial portfolio before other bills begin to share from your income. A supplemental Trust Deed can be drafted after the birth of the children so that the beneficiaries are specifically named in the said document. It is important to decide how long the Trust fund will last and what could possibly lead to it dissolving. It is also important to decide where the Funds will go if the beneficiaries never use it, or if some of the funds are left over after they are done with their education.

At United Capital Trustees, our Education Trust product creates a platform for you to address your child’s current and future education needs. You can safeguard your child’s future against unforeseen circumstances and life contingencies by ensuring the funds for their education will always be available. Settling the Education Trust involves spelling out your educational objectives for your child in a Trust Deed and then periodically putting funds aside in a Trust portfolio towards meeting those objectives, whilst simultaneously deriving superior returns from the said funds in the Trust. As experienced Trust services professionals, we administer the Trust in the manner specified in the Trust Deed. This Trust administration entails simulating the adequacy of the Education Trust Fund using key parameters, as well as remitting tuition, books or other fees directly to the local or international academic institutions where your ward is schooling and managing the funds to ensure it grows in value. The funds can be remitted in Naira, Dollars or Pounds to ensure that the risk of currency fluctuation is mitigated to a large extent. The contribution to the Education Trust fund is flexible enough to give you the parent, the ability to choose a preferred and convenient contribution plan. The Education Trust also has an optional life insurance benefit in collaboration with our affiliate insurance company.

The scientific simulations of the Education Trust Fund adequacy will also be carried out by our Finance experts. The parameters for the simulations will range from your estimated cashflows, to the level of education you wish your children to attain, to the time value of money considering inflation, to the estimated fluctuations in school fees, to the exchange rate risks in the option of international schooling. With our wealth of experience and pedigree, United Capital Trustees Limited is poised to guide you every step of the way to guaranteeing your child’s education.

Children are a godly heritage and every parent’s desire is to love and protect them. It only makes sense, then, that significant effort is made in securing their future by opening an Education Trust Fund account, for the primary purpose of ensuring that they face no financial hiccups for the duration of their educational pursuit.

Gift your child an Education Trust Account this Children’s Day by visiting www.investnow.ng ot download the InvestNow app via the Google Play Store or the iOS App Store.


By Buky Ikeotuonye – MD/CEO, United Capital Trustees Ltd.



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