Succession planning is the process of ensuring that your assets pass in the exact manner and distribution that you desire after your death which can be setup by a succession planning lawyer. This can be achieved through the use of a Will or a Discretionary Trust can be used.
Over the years, our team have drafted many complicated Deeds and Wills that have assisted with transferring and maintaining assets for the next generation. Further, Suzanne Lyttleton Lawyers, through our experiences of acting as VCAT appointed administrators can help establish Special Disability Trusts for the benefit of those with a disability.
Family Trusts are a popular investment structure that allows for great asset protection, tax efficiency and flexibility in distribution of income and capital to surviving family members. In a Family Trust, assets are held by a Trustee until they are distributed to the beneficiaries of the Trust, as specified in the Trust Deed. The Trustee of a Family Trust is typically a proprietary company, created for the sole purpose of the Trust, with each parent of the family holding a single share.
While the use of a Family Trust is attractive due to its flexibility and control for the parents, it does provide less certainty than a Will to surviving family members. This is due to the only ‘asset’ that parents can pass on to the children in their Will, in respect of a trust, is control over the trust – not the actual assets themselves. In an example of three children being given equal shares in the trust, this may allow two children to reduce the share of the third, or if unanimous voting is required, may allow one child to prevent the other two from enacting a beneficial decision. A Will on the other hand, passes the assets directly to the beneficiaries in the shares prescribed by the deceased.
There are options available for the parents using a Family trust to wind up the company on the death of both parents and pass the assets directly to the surviving family members, or deal with control issues structurally.
It is important to seek legal assistance in establishing a Family Trust, as a consideration of the technical requirements of a Trust Deed is required and Family Trusts can attract tax and stamp duty consequences.
For more information on succession planning legal advice or to speak with a trustlawyer in Melbourne please contact our office: 03 9646 4477