Family Business Inheritance and What You Need to Know

Safeguard the future of your family business with precise Estate Planning and family business inheritance.

Most business owners are so busy with the demands of running their own business that they do not take the time to attend to the future of their family’s involvement. As business owners usually have a strong focus on growing and running the business, quite often issues involving retirement, disability, Estate Planning and family business inheritance are pushed aside when they really should be dealt with sooner rather than later.

In business, there are always difficult options to consider. With a family business, there are additional emotional factors and delicate questions to answer. If you are the owner of (or involved in) a family business, these are some of the questions you should be asking yourself:

  • Has the child or relative who is most active in the business, earned the right to receive entire control over the family business?
  • Do you predict any resentment from the children or relatives who are not actively involved in the business? Quite often there is very little resentment shown while the business owners are alive, but after their passing there’s a risk that hidden resentment will arise.
  • Do you wish to provide for the active and non-active family members “equally” or “fairly”?
  • Have you acquired other assets that could be used to equalise your Estate Plan for other family members who aren’t active in the business? Usually a life insurance policy or retirement savings can be left to the non-active children to balance the Estate.
  • If you have chosen your spouse or de facto partner to inherit the business, what provisions are in place to keep the business in the family and prevent their potential new partner gaining control?
  • Who would manage the business in the event of you becoming disabled or incapacitated? A lot of business owners find it hard to hand over control, as the business is a big part of their life. Because of this, they tend to ignore fundamental issues regarding unforeseen events and retirement/succession plans.
  • How will you ensure that the active family member can run the business without intrusion from the other relatives who have their own expectations of how the business should be run or divided?

For a lot of family business owners these questions have never even been addressed because they have failed to consult with financial and legal advisor’s who have the expertise to help them. Estate Planning with an accredited specialist can help answer all of these questions and put in place a plan that will ensure your business will continue to thrive after your passing.

Rural farmers

With over 135,000 farms in Australia, it’s important that each farmer is thoroughly prepared for the future of their farm and Estate. Farmers who have multiple children must be particularly careful if they want to pass on the farm as a business. It’s important to ensure each family member gets a fair share without having to split up or sell the property. Enlist the help of an accredited specialist who will help you draft an extensive succession plan and long term strategy for the future of your farm.

Planning with a specialist will ensure that all of your bases are covered and the most suitable options for your Rural Estate Plan are chosen. Everything from retirement planning and Superannuation strategies, to investing in off-the-farm assets, insurance options and Capital Gains Tax implications can be addressed and resolved with an accredited specialist.

Unfortunately, many farm owners entrust this responsibility to someone who is unqualified or unsuitable for this area of Estate Planning. Failing that, farmers may have barely put any future provisions in place at all. Rural Estate Planning can be a very complex situation which requires the experience and knowledge of a trusted specialist.

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