Succession planning is a process which requires careful consideration of the whole of a person’s legal and financial circumstances, taking into account firstly the personal circumstances of beneficiaries. We look at your concerns about your beneficiaries – for example issues around health, debt, exposure to undue influence of third parties, asset protection.
We are often engaged to establish disability trusts for beneficiaries who are disabled and concerns are held for how they will manage when their carers pass away.
We also look at how you hold your assets for example, assets owned personally, owned by companies or held by trusts, taxation requirements, asset protection, complex family situations and a range of other legal and financial matters.
A balanced estate plan is not limited to the preparation of a will to ensure assets are managed and distributed in accordance with your wishes. It involves much more. A well thought out plan might include consideration of the following;
- A Will,
- Shareholder and partnership agreements which address current management and ownership issues, and the future succession of management and ownership,
- Integrated company, trust, and superannuation structures,
- The use of devices to avoid assets passing through your estate such as family trusts, insurance, joint tenancy and superannuation,
- An enduring Power of Attorney,
- Advice from your accountant or planner about tax planning which addresses income tax, capital gains tax and stamp duty implications of transferring assets and/or managing assets upon death or other keys events,
- A range of critical events – not just death. There are many events which you may wish to consider when formulating a plan. They include events which may occur whilst you are alive and others which might occur after your death – all of which have the potential of impacting upon your financial welfare or that of your future beneficiaries.
A few of the more common examples are the possibility that you or one of your beneficiaries may be affected by;
- the desire to leave a close relative out of your will,
- mental or physical incapacity of you or a beneficiary,
- A beneficiary’s exposure to issues of undue influence and bankruptcy.
- your bankruptcy or the business failure, or the bankruptcy or business failure of a beneficiary or a spouse of a beneficiary,
- divorce, yours or that of a beneficiary,
- retirement, or
- a dispute over the will.
- The use of a testamentary trust in your Will to enable maximum flexibility so that a beneficiary can enjoy the maximum benefit and protection from your estate. In addition to flexibility, testamentary trusts potentially afford ancillary benefits such as the minimisation of taxes payable by a beneficiary and the protection of estate assets against failed marriage, bankruptcy and dispute;
- The use of insurance coverage as an asset in your plan,
- Balancing the rights of different categories of beneficiaries to receive income and/or capital and the right to control income and/or capital, and
- Referral to experts who can tailor the most suitable financial plan.
Not all of these of course will necessarily in every case.
Ideally an estate plan should be developed, coordinated and linked with a financial plan which includes a retirement plan, investment and wealth accumulation strategies.
Not unlike estate planning, the preparation of a financial plan is a process commencing with a detailed analysis of a persons current personal and business affairs, their lifestyle, their risk aversion and their aspirations, current and for the future.
Based on the results of that analysis, a financial planner must then develop (in conjunction with you and your accounting and legal advisers), strategies to address;
- protection of the persons assets (in common with estate planning element),
- the growth of the persons wealth,
- retirement, and
- future asset distribution (in common with estate planning) all tailored to suit your particular circumstances and wishes.
Implementation of Plan
Lastly, a financial plan must spell out a blue print for the implementation of the strategies and recommendations to achieve your goals.
Again like estate planning, financial planning involves a multitude of professional disciplines including, investment, insurance, superannuation, taxation, accounting, and legal professions. Most often the preparation of integrated estate and financial plans involves input from your accountant, a financial planner and a lawyer familiar with estate and financial planning issues. Depending on the complexity of your affairs, specialist advice (for example on capital gains tax) might also be required from a suitable expert.
So who do you go to? Any one of the required team (the accountant, financial adviser or lawyer) can take an over reaching or umbrella view of your affairs and coordinate the range of services and advice needed with a view to producing integrated and harmonious plans which address all of your needs.