Succession Planning in Western Australia: Essential Preliminary Steps
Creating a strong succession plan for your business, farm, or estate in Western Australia is more than just securing the next generation’s involvement; it’s about ensuring a seamless transfer of assets, reducing potential conflicts, and maintaining the longevity of your business. At Granich Partners, we specialise in navigating the complexities of succession planning for Western Australian businesses, with particular expertise in agribusiness. Here are some essential steps to consider as you prepare for an effective succession plan.
1. Balance Sheet Cleanup for Trusts
A crucial preliminary step in succession planning is to assess and tidy up the trust’s balance sheet, particularly debts between beneficiaries and the trust. Here’s why:
Debts owed by the trust to beneficiaries are typically manageable.
Debts owed by beneficiaries to the trust, however, may complicate estate planning, as these debts are often collectible from the beneficiary’s estate, potentially impacting their heirs.
To prevent this, consider:
Offsetting beneficiary debts with capital distributions or other receivables.
Making a particular gift to farming children conditional upon them assuming liability for any debt owed by their parents to the trust, thus protecting the entitlements of other beneficiaries.
At Granich Partners, we can help you evaluate the financial implications and find strategic ways to address debt issues in your succession plan.
2. Transition to a Corporate Trustee
A corporate trustee is an invaluable tool in succession planning. Unlike individual trustees, a company exists in perpetuity, which simplifies transitions by eliminating the need to appoint new trustees after a shareholder’s death. This structure also allows you to:
Avoid land transfer complexities upon the death of shareholder directors.
Minimise the need to involve State Revenue, Landgate, or banks in property transitions.
Put in place long-term control structures, such as shareholder agreements or constitutional amendments, to govern trust management as control shifts to the next generation.
With Granich Partners, you’ll gain the advantage of our extensive experience in setting up corporate trustee structures tailored for Western Australian businesses, which can ensure stability and a clear line of control for future generations.
3. Comprehensive Review of Trust Documentation
Thoroughly reviewing all trust documents with an experienced trust lawyer is essential. Trust deeds, beneficiary designations, and other critical documentation must be aligned with your succession goals and free from any issues that could lead to unintended asset distribution. Here’s an example:
A client who inherited a farming property via trust had off-farm siblings as beneficiaries, as specified by the trust deed. If the client were to pass away without appointing a successor guardian, the trust’s assets could be distributed to off-farm siblings instead of the client’s spouse and children.
To prevent such oversights, we ensure that trust documents are meticulously reviewed and updated, addressing any gaps that might undermine your succession plan’s intentions.
Trust Granich Partners for Succession Planning
With decades of experience serving Western Australian businesses and agribusinesses, Granich Partners is the ideal choice for your succession planning needs. Our expertise in trusts, estate planning, and corporate structuring allows us to provide holistic, practical solutions that align with your unique goals. We’re here to help you navigate every step of the succession process, so you can pass down your legacy with confidence.
Start Succession Planning Today
Ready to secure your business’s future? Contact Granich Partners for expert guidance on succession planning, estate planning, and trusts tailored to the needs of Western Australian businesses.