Succession and Estate planning. Where to start.

Rohan Brown

Recently in discussion with clients it is clear that many people want to undertake the Estate and Succession planning, however they are unaware of how to go about it and who can assist them.

Anyone with assets needs to consider their future Succession and Estate planning needs. The terms are used interchangeably, but whilst similar they are subtly different. Succession relates to the continuance of an investment or business and the passing of that to others, whereas Estate planning tends to deal with the manner in whilst assets will be left to others via a Will.

The first thing to put in place an effective plan is the preparedness of those involved to work through a process and the desire to put a plan in place. This can often be as simple as the preparedness to talk about their wishes.

Next step is to list the assets and associated liabilities that you have. Ideally this should include details about the asset such as a description, who owns the assets, the costs of acquisition or value when acquired, when and how it was acquired and finally if there is any debt associated with it. This gives a clear view of what there is to be dealt with. This need not just be the big things such as property and cash, but can be as small as personal items with no monetary value, but which may have significant sentimental value.

Once you know what you are dealing with, next is to work out who you are providing for and what assets you may feel need to be provided to whom. This is the point that you really need to speak with and adviser. The advisers’ role is to discuss what you have prepared so far, understand what you are wanting to achieve. From there the role of the advisor is to discuss those points raised, consider pros and cons of the wishes presented and formulate options to meet your individual needs.

The advisor at this point may need to consider options and put together a strategy before meeting again with a plan. That plan may involve use of structures, loans and contracts to achieve certainty, asset protection and fairness. Generally, the aim of this will be to retain ownership and provide certainty for you. At the presentation meeting the adviser will put forward their recommendation. It is at this stage you need to ask questions and give feedback. At this point everything is still up for change or re-thinking, it is just a proposal.

After finalising a plan with the adviser, after constructive discussion and alteration of the advisers’ plan, it is highly recommended to now discuss or present the plan to family members to who may be affected. It is better to get their feedback now while you can either consider their thoughts or explain the reasoning for your thoughts.

Once settled the adviser will formalise written instructions to be put in place by a legal adviser. When the Solicitor has documented and made the required Will changes and implemented other instructions the initial adviser needs to again revisit the work completed to ensure the plan has been implemented as discussed prior to you signing.

The most important part of the plan then takes place. To from time to time review the plans you have in place. Particularly be aware of changed circumstances in the future that may require alteration of your plans. This may be due to changed thoughts, untimely death of would be recipients, changing family relationships etc.

The above is just a guide to putting in place a plan. The best course of action to firstly talk to an adviser such as your Accountant will together with you or with assistance from others start and help with the succession process.

Importantly start today, you may not be able to tomorrow.