Succession Planning

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Published by Preston Law on 09/01/2018

Many business owners in Cairns believe that because they have a Will, they have made adequate preparations for passing on their business interests after they die. Unfortunately, many of them are wrong.

Unless proper consideration was given to the structure and type of assets you hold when you prepared your Will, there is a good chance it won’t do what you want it to. If you own a business in Cairns, have a family trust, or have a large blended family, there are some key things which your lawyer should factor in when preparing your Will:

  • Ownership – how are your assets held? Do you own your house on your own, jointly, or as tenants in common? Is your business set up as a company with you as the sole director? Are there multiple trustees of the family trust? People often believe they “own” an asset when it is in fact held by a company or trust and therefore cannot be distributed by your Will. Properly understanding how your assets are owned means your lawyer will help you explain what you can and can’t do in your Will and allow them structure it in such a way as to give you maximum control.
  • Relationships – just who has an entitlement to your estate according to the Law?You may wish to leave more to one child than another or cut someone out of your Will altogether. This is perfectly legal, but it is important to note that if someone believes they haven’t been properly provided for in your Will, they may seek legal advice and challenge it in Court. It is important to understand what rights people might have to your estate, even if you don’t want to leave them anything in your Will. Your lawyer may suggest additional documents explaining your reasoning for excluding someone from your Will or that you leave a small bequest to an individual to make it harder for them to bring a claim against your estate. At the end of the day, you can’t prevent a person from making a claim against your estate, but a good lawyer can advise you of the risks and take steps to make it less likely that such a claim would be successful.
  • Superannuation – More and more people are holding assets within a self-managed super fund, but it is important to note how those assets will be dealt with on your death. Usually, superannuation assets don’t form part of your estate, and are instead distributed directly to your nominated beneficiary. Your lawyer can work with your accountant or financial planner to ensure this happens in the most tax effective manner for your beneficiaries.

Whilst you can make whatever arrangements you like for the disposal of your estate after your death, the reality is that the law may not allow things to unfold in accordance with your wishes. It is important to work with your lawyer to ensure your wishes are followed after your death.

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