Whilst this is an emotional issue, estate planning is an absolutely essential part of life. This has never been truer for the business owner. If a business owner happens to be in a partnership then it becomes even more imperative to ensure your estate is structured in such a way as to protect not only the successful continuation of your business and associated partners but more importantly, that of you bereaved family.
Like the mechanic who does not take the time to fix his car and the carpenter’s long list of home repairs, a business owner is often so busy helping his clients succeed that he forgets to ensure the continued prosperity of his own livelihood.
Brisbane accountants, Affinity Accounting Plus possess many years’ experience in the complicated arena of business succession planning. With their guidance in creating an appropriately drafted written agreement any and all conflict that may arise from the death or permanent disablement of a partner can be bypassed.
Buy Sell Agreements
In these insurance funded agreements, jointly owned business members may implement a plan that allows the surviving partner to purchase the interest of the departing principal.
This allows the surviving members of the business to continue to operate and prosper whilst permitting the departing partner’s family freedom from any obligation.
Navigating this style of agreement, like any insurance policy, is obviously best done prior to an invent occurring. The essentials of this agreement revolve around the agreed value of the business. By having an arrangement in place that is regularly reviewed, all parties understand their obligations thus avoiding any and all stress.
A typical insurance funded buy sell arrangement is a self-owned policy. This allows complementary alternatives to be structured according to the situation and requirements of the beneficiaries.
Strategies for the Future
One option is to structure a business owners will to minimise capital gains tax and stamp duty. Another option is the inclusion of a testamentary trust into the will. This allows all proceeds to be managed in a sheltered, tax efficient environment. The policy ownership can also be structured via a superannuation fund.
How you choose to distribute and manage the funds depends on many factors, some of which are your current age, whether you have surviving children who have ongoing educational requirements and what your current financial position is in relation to personal debt such as a mortgage.
The sound advice that Affinity Accounting Plus http://www.affinityplus.com.au provide will ensure the safety and comfort of your loved ones should tragedy strike.
