The laws of succession which determine who is entitled to the property of a deceased person, are governed in New South Wales by the Succession Act 2006, which provides the rules and regulations for the making of wills and the administration of the estate after death.

In the past the majority of wills were fairly straight-forward, as will makers in general owned limited assets and the limited values of most estates meant that it was not worthwhile embarking on a challenge to a will in the event that one was dissatisfied with one’s inheritance or the lack thereof.
All of that has now changed and most people have significant diversified asset holdings held in a number of different legal structures. Marriage and relationship breakdown with subsequent relationships are more common leading to an increase in the number of blended families. Add to that people’s increased longevity and resultant extended periods in retirement and the need to cater for this both in the family circle and in the business environment. Business owners need to look at a succession plan for the family business with all that that entails.
We are looking at what has been termed ‘the greatest transfer of intergenerational wealth in history’, and it is important to obtain sound legal advice to consider the numerous options available to you to help you make the decisions that are in your interests. Nowadays, this process must be carried out with your financial and tax advisers in a holistic manner to ensure the best outcome for you. Here is a sample list of questions that need to be considered:

Wills

  • Do you wish to offer a testamentary trust in your will to your beneficiaries for tax effectiveness or to give asset protection to a beneficiary?
  • Have you considered the effect of marriage/divorce/remarriage and the issues posed by blended families?
  • Are you aware of the rules relating to the payment of superannuation benefits and your assets outside your estate?
  • Does your will require an adjustment clause to ensure that each child would benefit equally when one or more may receive benefits outside your estate?
  • Are you aware of potential Family Provision Claims against your estate and want to deal with this potential threat in the context of the will?
  • Have you considered income tax, capital gains tax and stamp duty implications for your estate?

Estates

In dealing with the estate of a deceased person, the executor is required to address:

  • Where are the assets located within the various legal structures?
  • Who are the creditors and are there sufficient assets to pay them all?
  • What are the tax obligations of executors?
  • Tax rates for deceased estates.
  • Capital gains taxes and deceased estates.
  • The implications of testamentary discretionary trusts.
  • The relationship between estates and superannuation benefits.
  • What happens if an ‘eligible person’ challenges the will?
  • What happens when there is no will and the deceased dies intestate?

Family Business Succession Planning

The vast majority of Australian businesses are family owned businesses, being operated successfully by selected members of the family. But the majority of these businesses do not have any strategies in place for the transfer of the ownership, management and financial responsibility of the business – there is no business succession plan or family business constitution. This has huge potential for damage to the future prosperity of the business and conflict between family members. Business owners are often reluctant to address these problems as it means making tough decisions which impact on the current status quo and they invariably end up in the ‘too hard basket’.
Business owners need to do more than satisfy the annual requirements of the Australian Taxation Office and give consideration to concepts such as the following:

  • Creating a family business constitution, incorporating the vision of family members.
  • Identifying the most appropriate legal structure to govern the business.
  • Developing management succession plans to assist in the retirement of family members.
  • Deciding on whether the business requires the assistance of non-family external expertise at board level or at management level.
  • Asset protection measures that may be required in the business.
  • Ensuring all business management succession plans, retirement plans and estate plans of family members are consistent with each other and do not provide for competing strategies

We can assist with:

  • Preparation of Wills and Estate Planning
  • Family Business Succession
  • Probate/Letters of Administration Applications & Administration of Estates
  • Testamentary Trusts
  • Estate Disputes

Also:

  • Retirement Villages/Aged Care Contracts and Planning
  • Intergenerational Family Accommodation Agreements (IFAA’s)
  • Loan Agreements for Family Members
  • Enduring Powers of Attorney/Enduring Guardian/Advance Medical Directives
  • Advice on Reverse Mortgages