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The short answer
A trust can hold Nigerian property, so that trustees keep and manage it for named beneficiaries and it does not have to wait for probate when you die, but moving land into a trust is a transfer that needs the Governor's consent under the Land Use Act, and a trust run from Nigeria is usually a foreign trust for US purposes. A US owner of a foreign trust files Form 3520 and the trust files Form 3520-A, with penalties of at least $10,000 for missing them (IRS instructions, December 2025).
What a trust does
In a trust, you (the settlor) transfer property to trustees, who hold the legal title and must manage it for the beneficiaries on the terms of a written trust deed. Families use trusts to keep a house for several children without splitting it, to have someone manage rent while the owner is abroad, or to avoid the delay of probate and letters of administration when the owner dies, because property already held by trustees is not usually part of the owner's estate to be administered.
That last point matters in Nigeria. In Lagos, letters of administration involve two administrators, sureties, an interview, a 21-day publication and estate fees assessed as a percentage of the estate (Mondaq, May 2024). Property already in trust can avoid that process for the assets in it.
The Nigerian side: getting land into a trust
- Consent. Under the Land Use Act, s.22, the holder of a statutory right of occupancy may not alienate it by assignment, mortgage, transfer of possession, sublease or otherwise without the Governor's consent first had. Transferring a C of O property to trustees is an alienation, so plan for the consent process and its fees.
- Stamping and registration. In Lagos, instruments are stamped within 30 days of execution and registrable instruments registered within 60 days (Legal500 summary, undated). The deed of assignment to the trustees and the trust deed itself should be prepared by a Nigerian lawyer.
- Who the trustees are. Individuals in Nigeria you trust, a licensed trust company, or a body registered with the CAC as incorporated trustees. Incorporated trustees are mainly used for associations, churches and charities; the Nigeria library's guide to CAC Part F registration explains that route.
- Family land. Land you hold only as part of a family cannot be put into your own trust without the family's agreement and a clear title.
The US side: foreign trust reporting
Whether a trust is foreign or domestic for US tax is a technical test, but a trust with Nigerian trustees managing Nigerian land will usually be foreign. The IRS instructions for Form 3520 (December 2025) say US persons file Form 3520 to report certain transactions with foreign trusts and ownership of foreign trusts under the grantor trust rules, with a separate form for each trust, even in a year with no activity.
| Form | Who files | When | Penalty for failure (instructions, Dec 2025) |
|---|---|---|---|
| Form 3520 | US person who transfers to, receives from, or is treated as owner of a foreign trust | With your income tax return timetable | Greater of $10,000 or 35% of the amount transferred or distributed |
| Form 3520-A | The foreign trust, for its US owner | 15th day of the 3rd month after the trust's year end | Greater of $10,000 or 5% of the trust assets treated as owned by the US person |
| Form 8938 | US owner of a foreign grantor trust, above thresholds | With your return | Separate Form 8938 penalties |
The IRS comparison chart (September 2026) marks assets held by a foreign grantor trust you created as reportable on Form 8938. A US owner can attach a substitute Form 3520-A to their own Form 3520 if the trust does not file, by the Form 3520 due date.
Worked example
Example only. Kemi, a US citizen in Ohio, transfers a Port Harcourt house worth the equivalent of $120,000 to two cousins as trustees for her three children. Kemi keeps the power to revoke the trust, so it is a grantor trust she is treated as owning. In the year of transfer she files Form 3520 reporting the transfer and makes sure Form 3520-A is filed. If neither were filed, the initial penalty on the transfer alone could be the greater of $10,000 or 35% of $120,000, that is $42,000.
Does a trust help?
| It may help if | It may not be worth it if |
|---|---|
| You want property kept intact for several heirs | You own one plot of modest value |
| You want a manager in Nigeria now, not only after death | You have no one in Nigeria you trust to act as trustee |
| You are prepared for annual US forms and a cross-border accountant | You will not keep up with yearly filings |
| Family relations make a probate dispute likely | A simple Nigerian will would do the job |
Alternatives include a Nigerian will with a Nigerian executor (see writing a Nigerian will from the US) or a family company (see a family property company owned by US siblings), which has its own US filings.
What to check first
- Is the title clean and in your name? Get a land registry search.
- Who will be trustee, and will they still be suitable in ten years?
- Ask a Nigerian lawyer for the consent, stamping and registration costs and time.
- Ask a US accountant whether the trust would be foreign or domestic, grantor or non-grantor, and which forms follow.
- Decide whether the trust is revocable, since that affects both control and US treatment.
Where Pryme fits
Pryme does not act as trustee. Trustees collecting rent can keep naira and dollars in one account with local details for each, and generate a verifiable statement through VerifyDoc.ai for the beneficiaries and the US accountant. Information only, not legal or tax advice.
Questions people ask
Can I put my Nigerian house in a trust while living in the US?
Yes, with a Nigerian lawyer, but transferring land to trustees needs the Governor's consent under the Land Use Act, and the trust is usually a foreign trust for US purposes.
What IRS forms does a Nigerian trust need?
Usually Form 3520 from the US person and Form 3520-A for the trust, plus Form 8938 for a grantor trust above the thresholds.
What is the penalty for not filing Form 3520 for a foreign trust?
The greater of $10,000 or 35% of the amount transferred or distributed; for Form 3520-A, the greater of $10,000 or 5% of the trust assets.
Does a trust avoid probate in Nigeria?
Property already held by trustees is generally not part of your estate to be administered, so it can avoid probate or letters of administration for those assets.
Sources
- IRS: Instructions for Form 3520 (Rev. December 2025) · accessed Oct 2026
- IRS: Comparison of Form 8938 and FBAR requirements (reviewed 19 Sep 2026) · accessed Oct 2026
- Land Use Act, Cap L5 LFN 2004 (PLAC Laws of Nigeria) · accessed Oct 2026
- Legal500 (Tope Adebayo LP): Governor's consent, stamping and registration in Lagos · accessed Oct 2026
- Mondaq (Tope Adebayo LP): Issuance of letters of administration in Nigeria, a practical approach (29 May 2024) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.