Succession Planning For Your Business

Do you know what will happen to your business if one of your company’s shareholders dies or loses capacity?

Succession Planning For Your Business

If you are in a business with shareholders, your business faces a major potential threat if one of your fellow shareholders dies or becomes permanently incapacitated.

Business Succession Planning is part of modern integrated estate planning, and your interest in your business may be a substantial part of your personal net worth.  Good planning through buy/sell agreements and appropriate insurance can make all the difference. For many businesses, if no pre-existing arrangements are in place, the death of a shareholder can mean their shares in the company will go to the beneficiaries of that person’s deceased estate.

Business Succession Planning

Business Succession Planning

Think about how much time and effort you put into building your successful business, and then imagine what would happen to your achievement if you failed to plan for the future.

Without a solid business succession plan in place, your company could quickly crumble upon your retirement or death, resulting in much heartache and potential loss of value for your family members and employees.

Fortunately, the Adelaide estate planning lawyers at Genders & Partners can help you navigate this complex area of law so that you can have peace of mind about the long term future of your business.

What Happens When You Do Not Secure a Business Succession Plan in Adelaide?

Business owners put off creating a succession plan for many reasons. They may fear death and not want to talk about the inevitable. They may also be reluctant to give up control of the business during their lifetime, or they may have difficulty choosing a successor among their children or other family members. Even when it is understood who the successor will be and how the business is to be handled, failure to legally document your wishes often results in contention and costly mistakes.

Wills and Estate Planning Adelaide: Asset Protection – Be Smart, Be Safe

Asset Protection – Be Smart, Be Safe

Asset protection is a valuable and important part of a modern integrated estate plan. No matter how many assets you have, you should make an effort to protect them, but try to avoid these common mistakes:

1. Incorrectly registering or “titling” your assets. In my work, I see many clients who are convinced that their assets are appropriately titled, only to discover serious errors upon checking. This is often a case where the weakest link in the chain (maybe some teenage clerk at a busy registry office) has mis-described the asset or its owners. Correct registration of assets is critical to the ownership & control tests which underpin all of your legal protections.

2. Deferring or delaying your protection planning. If you wait too long, it will be too late. Like insurance, you generally cannot apply for protection after the disaster has already struck. The longer your asset protection plan has been in place, the stronger it is likely to be. It will also cost less to do the planning long before you have a problem. Once a lawsuit has been filed against you, any transfers you make thereafter can be prevented or overturned. Make sure you have your asset protection plan in place and up to date long before you need it.

3. Mistakenly committing fraudulent transfers. If you try to transfer assets to a friend or family member in order to avoid losing them during a settlement, you may find that the courts can reverse the transfer and hold the parties to the transfer partially responsible for criminal &/or civil penalties. People really have gone to jail for attempting this. However, if the transfer is done carefully, and well before any litigation arises, then this strategy can be made to work in certain circumstances.