Business Estate Planning

Estate Planning is more than just having a Will. It is about planning, so that:

  • your wishes are set out in the event you are unable to make decisions about your assets or your health; and
  • when you die, your assets can be distributed as you wish, and in the most effective and efficient manner.

Estate Planning is preparing for events such as death or loss of decision making capacity (for example dementia, mental illness, brain injury etc). These events trigger a change in the control and/or ownership of your assets and entities.

Estate planning is making sure the right documents are in place so that control of your assets in either your personal estate or through any entities such as a business, company or partnership you have a control in, are given to the people you trust and distribution of your assets is provided to the people you love to ensure they are looked after.

What documents do I need to consider for my Estate Planning requirements?

Estate Planning usually includes preparing the following documents:

  • Your Will
  • Assessing your legal capacity – do you have the capacity to make significant decisions about your assets
  • The implications of a Simple Will
  • Complex Wills with Family Discretionary Trust or Protective Trusts
  • Binding Wills
  • Urgent Wills due to travel, illness or near death
  • International Wills
  • Enduring Power of Attorney (Financial and Personal)
  • Appointing a Medical Treatment Decision Maker
  • Advance Care Directives

What happens if I have a controlling interest in a business or company?

Business succession planning is just as important as having a Will. If you have worked hard to build up your business assets, it may all be lost unless you have a succession plan in place.

All too often we see that many of our clients do not understand what assets their businesses, companies, trusts or family members actually own. Clients sometimes mistakenly think that they personally own the properties, cars and shares which in fact are owned by, for example, a company.

They wrongly believe they can use their Will to transfer these assets to their loved ones when they die.  This misunderstanding can have dire consequences when these assets are in fact held by companies and trusts controlled by business partners, and the deceased’s family members are dismayed to find that they have little or no control over these assets.

If you have entities such as a business, trusts or companies that hold assets then your estate planning may also include Business Succession Planning:

  • Reviewing your company and trust structures to understand what assets you own personally and those assets your business owns
  • Review of your Trust Deeds and Company Constitutions to understand what happens to your control over the entities when you die or lose capacity
  • Shareholder Agreements
  • Buy/Sell Agreements
  • Deeds of Variation

How can my assets be owned?

Assets can be owned:

  1. In your sole name, personal assets or a share in an asset such as assets held as tenants in common
  2. Jointly, joint assets – for example, the matrimonial home is often jointly owned
  3. By other entities you control such as businesses, trusts or companies.

What are personal assets?

We all have personal assets that we own such as real estate, motor vehicles, bank accounts, shares, art, jewellery and our personal belongings. When these assets are owned in our sole name or in our sole name as tenants in common (meaning you may own a 40% share in real estate as a tenant in common) you are able to distribute these personal assets under your Will as you wish.

What are joint assets?

You may hold assets jointly with your spouse, family members or business partners. A jointly held asset is not owned in parts (for example 60%/40%). A joint asset is where each owner or proprietor owns the whole asset equally and jointly.

Where an asset is owned jointly it cannot be devised in a Will; that is, you cannot bequeath your portion of it to someone of your choice. On your death, this asset will automatically be transferred to the surviving owner. This is called the law of survivorship.

What are assets owned by entities we control (trusts, companies etc)?

Sometimes we have assets owned by entities such as trusts or companies.

Normally, you or another family member has control of these entities through appointments or roles such as being a Director, Shareholder, Trustee, Corporate Trustee and/or Appointor. These roles all have important powers that manage the operation of the company or trust and some of these roles further decide on distribution of the asset in the company and/or trust.

Upon your death, the control of these entities and their assets will pass by law or under terms set out in a Deed of Trust or a Company’s Constitution to people you nominate or appoint. It is therefore important that these appointments or nominations are in place so control falls into the hands of the people your trust.  Assets owned by entities or jointly cannot be distributed under a Will.

If you would like to have a complete plan for your future and for the future of your loved ones, David Davis can arrange an appointment for you to speak with one of our estate and business succession lawyers.

We work with business owners and families with both simple and complex issues, assets and structures including those with family discretionary trusts, unit trusts and/or company entity structures, same-sex families and blended families.  Our estate and business succession planning experience provides you with the peace of mind to know that your loved ones will receive their intended assets

Contact David Davis Lawyers

Phone: 03 9014 1299
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