MANY AUSTRALIAN BUSINESS OWNERS HAVE NO PLAN FOR INCAPACITY OR DEATH – LEAVING BOTH THEIR FAMILIES AND BUSINESS EXPOSED
Many Australian business owners are unprepared for incapacity or death, putting both their families and their businesses at risk.
Leon McPaul (Partner, Wills, Trusts & Estates) sat down with Ticker TV to discuss corporate powers of attorney for incapacity, director incapacity, and succession planning for businesses – including who takes the shareholding and control of a company.
LEON MCPAUL DISCUSSING SUCCESSION PLANNING AND CORPORATE POWERS OF ATTORNEY
KEY TAKEAWAYS FOR BUSINESS OWNERS
Here is what every business owner should take away from the conversation:
- Incapacity causes immediate disruption: Without a clear protocol for who steps in to manage the company, there may be nobody with the authority to act.
- A succession plan needs names and scoped roles: Appointing successors and defining what each of them does is the difference between an effective plan and an intention.
- Your enduring power of attorney does not make someone a director: It covers your personal and financial affairs, not the running of your company.
- Buy-sell agreements are one of several mechanisms available: They set out how a business transfers on an owner’s death, so families and surviving owners aren’t negotiating at the worst possible moment.
- Document it while you can: Long-term owners should take proactive steps now to secure their legacy. Decades of work can be undone by arrangements that were understood but never written down.
YOUR COMPANY AS PART OF YOUR ESTATE PLAN
Planning your personal assets is only half of the picture.
Clients regularly come to us for advice about their personal assets and what happens to them in an emergency such as incapacity. What tends to get overlooked is a contingency plan for their company and business affairs.
That company might be the family business, one entity within a larger corporate structure, or the trustee of their trust. Each of those brings its own considerations and should be addressed on their own terms.
Natasha Hawke (Associate, Wills, Trusts & Estates) has worked through those considerations, in a separate article covering the parameters a director should weigh when putting a contingency plan in place for their legal and financial matters.
You can read it here: contingency planning for company directors.
HOW KPA CAN HELP?
Our Wills, Trusts and Estates team at KPA Lawyers can provide an initial review of your succession arrangements to assist you with ascertaining whether your company has a contingency plan in place for incapacity and whether your existing documents would hold up if you were unable to act as a director.
Get in touch with one of our team to discuss your situation and how one of our experienced lawyers can assist you.
