Estate Planning
In servicing the interests of high net worth clients, succession planning is an important feature of our commercial team’s responsibilities. Clients of this calibre invariably have created a complex web of companies and trusts in which their wealth is contained. A will cannot govern the succession of assets held by these entities. It is therefore necessary to consider succession plans for companies and trusts. These in turn require careful attention to detail in avoiding unexpected taxation consequences arising from a resettlement of trusts or stamp duty consequences especially in land rich entities, companies and unit trusts.
We recently structured an estate and corporate group plan for a family which was particularly concerned to account for unequal and substantial gifts given to various family members over time. Compensating gifts would be made by the associated companies and trusts after the death of the patriarch and matriarch of the family.
This was addressed through a number of initiatives, which included:
- The creation of special purpose class trusts which provide each class of beneficiaries with different entitlements to income and capital with appropriate flexibility to vary these entitlements during the life of the patriarch and matriarch of the family.
- Special purpose consultancy where drafted to regulate management of the corporate trustee.
Once in place, the client is comfortable that the succession of his assets will have appropriately looked after all family members. The carefully structured plan also provides certainty to ensure there is no misunderstanding amongst the beneficiaries after the passing of the creators of the wealth. Often complex taxation and stamp duty issues need to be addressed.