Very often we speak to business owners that are successful in business but may not of received the correct advice or current advice around areas outside their business which include:
Below is a typical case study that we see with Business Owners with where they are currently exposed and how we provide a holistic solution.
The Thompson family includes William (65 years old), Lisa (63 years old), and their daughter Megan (35 years old). They live in Brisbane, Australia. William owns a successful manufacturing business, valued at AUD 12 million. Other assets include their family home, a holiday house, shares, and cash savings all held in their personal names. Their combined net worth is approximately AUD 15 million.
The majority of their wealth is tied up in the business, and they have simple wills leaving everything to Megan and have not put in place enduring powers of attorney.
1. Exposure to business risks could affect their personal assets.
2. Limited estate planning with no enduring powers of attorney provide a lot of exposure to the business along with assets that will be passed to Megan.
3. Lack of a succession plan for their business and personal assets.
William and Lisa establish a Family Protection Trust with a line of succession to provide bloodline protection for their family wealth moving forward. They also use an advanced Gift/Loan back strategy to secure their personally held assets against any creditors or litigation. We also restructure their business to hold all intellectual property in a separate entity that leases the IP to a separate trading company. Their trading company is owned by a separate Family Protection Trust so that the business is protected and income can be distributed to family members in the most tax effective way.
For succession planning, they put a business succession agreement and successor director solution in place, with Megan groomed to take over the management of the business. A board of guardians was also established so that Megan had the right team around her with decision making and guidance for maintaining and building the business and family wealth further for the next generation.
By incorporating Family Protection Trusts with a line of succession of Leading Member Appointors, there is a seamless transfer in place for the family wealth and control from William to Lisa to Megan, meaning that very little is going to the estate on death and mitigating family provision claims and unnecessary taxes. We also update their wills to include a Testamentary Trust for Megan. Upon their death, the trust will provide a tax-efficient, protected inheritance for anything not held in their trust structures.
By employing strategies of asset protection, succession planning and protective estate planning, William and Lisa have safeguarded their assets, planned for a smooth transition of their business, established tax-effective estate planning strategies, and positioned themselves for a comfortable retirement.
Disclaimer: The information and any advice contained on this website is general in nature and does not take into account the objectives, financial situation or needs of any particular person. You need to consider whether the information is appropriate to your needs, and where appropriate, arrange an appointment to seek professional advice prior to acting on this information.
© 2024 Family Wealth Protection | Website by Creative Ground