Small Business Succession Planning

Do you run a small business?

Succession planning for your business is an important part of your estate plan.

Once your business has been established, a plan needs to be put in place to deal with what would happen to it if you pass away unexpectedly.  Over time, you may also wish to plan for your exit from the business when you retire.

The steps that need to be taken depend on the nature of the business, how its assets are held and the availability of employees or other officers to take control of its day to day affairs.

Appropriate planning can involve establishing structures such as companies or trusts so that control of the business can be easily passed to your chosen successor. You should also prepare a document dealing with practical matters including who will be responsible for notifying staff and clients if you pass away.  This document is sometimes called a business continuity plan, and can deal with arrangements for other crisis events such as the loss of the business premises.

If you would like advice about succession planning for your business, contact Althea at Hornsby Wills and Probate on 0410 485 277 or by email to althea@hornsbywillsandprobate.com.au

Family Trusts and Succession Planning

Do you have a family trust?  Trusts are often established for investment and business purposes and passing control of your trust is an important part of your estate plan.

Unlike most of your other assets, trust assets cannot simply be left to your children in your will.  How the trust is best dealt with depends the nature of the trust, the particular terms of the trust deed and your intentions in relation to the trust property.

Many family trust deeds will already have your children and their families included as beneficiaries and the most important decision can often be who should be placed in control the trust. This is particularly important in discretionary trusts where the trustee has absolute power to decide when and to whom to make distributions.

How to pass control of the trust will depend on when you wish to effect the handover, the terms of the trust deed and the identity of the trustee and appointor of the trust.  It is important that you obtain advice from a solicitor who is knowledgeable about succession planning for trusts to ensure that all documents are thoroughly reviewed and an effective transfer is made.

If you would like advice about transferring control of your family trust, contact Althea at Hornsby Wills and Probate on 0410 485 277 or by email to althea@hornsbywillsandprobate.com.au

Who is entitled to an estate where there is no will?

If a person dies without making a will, they are said to be ‘intestate’.   If this happens, provisions in the Succession Act 2006 determine who is entitled to the person’s possessions after they die (known as the deceased person’s ‘estate’).

The person first entitled to the estate will be the spouse of the deceased, including a de facto spouse.  If there is no spouse, the deceased’s ‘issue’ will inherit. This means the deceased person’s children or, if those children have already died, the deceased person’s grandchildren or further descendants.   Special rules apply where the deceased leaves a spouse and children of a prior relationship, or if there are multiple spouses.

If an intestate person dies without a spouse or children, their parents will be entitled to their estate or, if there are no surviving parents, their brothers and sisters.  If there are no parents or siblings alive to inherit,  the estate will pass to any surviving grandparents or, failing that, to the Uncles and Aunts of the deceased or their children.

If no one in the above categories survives the deceased, the state is entitled to all of the person’s assets, however there is a process whereby someone can apply to the state for provision to be made for them.

It is vitally important for people without a spouse or children or for those who are living in blended families to prepare a will to deal effectively with their estate.  For many in these circumstances, a distribution under the statutory order for intestacy will not be satisfactory, resulting in further distress and, possibly, litigation among surviving family members.

If you would like advice about preparing a will or about administering an intestate estate, contact Althea at Hornsby Wills and Probate.  Ph: 0410 485 277.  Email: althea@hornsbywillsandprobate.com.au