Relationships with your Successors - a strategic approach

Posted by Malcolm Campbell on 28 November 2016
Relationships with your Successors - a strategic approach

Proper estate planning is not all just about the will. As we covered in our earlier blogs there are many matters that need to be addressed to help assist you in circumstances prior to your passing  where you are unable to manage your own affairs. However, there are also matters which need to be thought about carefully and strategically that may arise upon your passing but which cannot be dealt with in your will at all or at least by your will alone.


The most obvious of these is superannuation. You cannot deal with your superannuation through your will alone. As superannuation is effectively held in a trust structure, you must ensure that you make appropriate binding nominations to the trustee of the Superfund so that your entitlements to the fund are received by your chosen beneficiaries. You can either direct that your benefits be provided to persons directly or you can have it paid to your legal personal representative such that it is then managed under the terms of your will. However, failure to make binding and effective nominations could lead to the trustee making payments to persons at their complete discretion.

The use of family/discretionary trusts is another example of a key area where your will does not pass ownership of assets from you to a beneficiary but, where done properly, can pass on control of the trust to your successors. Failure to ensure both the trust deed and your will deal with succession planning adequately can cause part of your estate plan to fail.

If you are a shareholder in a private company (typically one which is operating a business which generates the majority of your personal income) care needs to be taken that the issue of transferring shares in the company is adequately dealt with. Whilst you can deal with shares in your will, consideration should be given to the terms of any shareholders agreement which may be in existence. Shareholders agreements will often deal with the terms upon which shares can be transferred and may obligate you to offer them for sale to existing shareholders before they are transferred to any third parties. If there is no shareholders agreement then you should think very carefully about how transferring your shares to 3rd parties may impact on the operation of the company.

Where there are multiple entities which you own and/or operate and you wish to leave different entities to different beneficiaries it is important to ensure that the ongoing success of those entities is properly secured. Given that there is no guarantee that the beneficiaries you leave these different entities to will necessarily get along or ‘see eye to eye’, if they are in any way dependent upon each other’, proper measures should be put in place to ensure their ongoing viability as far as is possible. Things such as formal Service/Supply Agreements or formal long-term leases over property can help with this situation.

If your estate includes a business, very careful planning and strategy needs to be put in place to identify whether or not there will be a viable successor for the business or whether it will have to be sold. If an executor has to run the business on an interim basis having a documented strategy and plan in place that lists all of the key elements and issues for the business will be of great assistance to them. It is important that the key people involved in the day-to-day operation of the business are aware of your plan so they can assist the executor in ensuring your plan is put into place and if it involves a transition to an internal operator that this can happen smoothly and efficiently or that if the business is to be sold that maximum value can be obtained.

A key element to any estate and/or business succession plan is making sure proper insurances are in place both for the business and you personally. It is important that any insurance policies you take out are structured such that they will provide a real benefit and value to you and your family. It is very important to ensure that you work with an appropriately qualified insurance broker to tailor policies that will achieve your desired outcomes. Many standard ‘off the shelf’ insurance policies obtained within retail/industry super funds provide inadequate coverage and protection, which all too often is only discovered once a claim is made on them.

The expert team at Dooley & Solicitors can help guide you through the process of implementing a proper estate plan. We can develop a plan that is tailored to your circumstances, which will deliver exceptional value for money, ensure your needs are met during your life and that your legacy is maximised. Let us help guide you through the process of estate and business succession planning so you can move forward with clarity and confidence.