Explainer: Why next of kin cannot access deceased’s inheritance

Information of next of kin are usually key requirements for opening bank accounts, as well as retirement savings accounts as part of a customer’s details. Conventionally, next of kin is defined as the person or persons most closely related to a descendant by blood or affinity. A person’s next of kin is his closest living […]

Information of next of kin are usually key requirements for opening bank accounts, as well as retirement savings accounts as part of a customer’s details.

Conventionally, next of kin is defined as the person or persons most closely related to a descendant by blood or affinity. A person’s next of kin is his closest living relative, who will serve as first contact in the event of emergencies or eventualities. They also make decisions for the person in times of need or where the person is not readily available or unable to make personal decisions.

Overtime, this has been generally misunderstood as there is an erroneous belief that a next of kin is automatically entitled and or qualified to inherit from a deceased person’s estate. On the contrary, it is only those entitled to inherit a deceased person’s estate that can validly do so.

Consequently, a deceased’s next of kin is not ‘next’ to a deceased’s properties but one who can be called upon in any case of eventuality or emergency. A next of kin will only be needed for the provision of some vital information and making certain decisions on behalf of the one who named him and not to inherit his estate by virtue of his position upon his death.

As such, the main individual entitled to access the inheritance of any deceased estates is usually the ultimate beneficiary and not next of kin as widely believed.

Who is an ultimate beneficiary and how does it work?

A bank account beneficiary is an individual who may take over your bank account after you die. While bank owners are alive, the beneficiary won’t be able to view, deposit or withdraw from the accounts. Beneficiaries will not have access to the accounts until all the account owners have died.

Similarly, the law stipulates that when a person dies, leaving a will behind, he is said to have died testate. In such circumstance, the issue of next of kin becomes useless. The reason is that the wealth of the deceased will simply be shared in line with the contents of the will. The ultimate beneficiaries are therefore individuals that get the allocations from the will.

Bank account beneficiaries may be added at any time as one doesn’t need to assign a bank account beneficiary while opening a new bank account. You may also choose to remove a beneficiary from your account at any point if you need to.

Speaking on the matter with one of the tier one banks who didn’t want his name mentioned told Daily Trust on Sunday that, “In the context of banking in Nigeria, next of kin typically refers to a person designated by an account holder to receive the funds in the event of the account holder’s death. This designation is a precautionary measure for the smooth transfer of assets.

“On the other hand, the “ultimate beneficiary” refers to the individual or entity entitled to receive the benefits or proceeds from an account or financial transaction. This term is more broadly used in the context of financial transactions and can include various scenarios beyond just the account holder’s death.

In summary, while next of kin specifically pertains to the designated recipient upon the account holder’s demise, the ultimate beneficiary encompasses a broader range of situations where someone is entitled to financial benefits,” he explained.

He added, “In reality in Nigeria however, the concept of ‘Payable on Death’ Authorisation is unknown to the extant various administration of estate laws.

“No framework in Nigeria upholds PoD Authorisation form nor any other documentation or legal framework that grants the estate of a deceased customer automatic access to the deceased’s account without the need of probate process.

“Therefore, upon the death of an individual account holder, the estate of the deceased must apply for and obtain a letter of probate (where the deceased left a will or died testate) or letters of administration (where the deceased died without a will or died intestate). This will be brought to the bank for due process before the funds will be administered.”

This explainer was produced in partnership with the Centre for Democracy and Development (CDD).