Superannuation

Leasing business premises from a SMSF

Many business owners own the commercial or industrial premises that they use to operate their business from.  Often that property is owned by a Self-Managed Superannuation Fund (SMSF).

Leasing business premises from a SMSF is becoming commonplace. SMSFs can be a tax-effective way to create wealth and provide for your retirement, in addition to providing some asset protection benefits however, they come with a requirement to comply with the Superannuation Investments (Supervision) Act 1993 (Cth) (SIS Act) and its Regulations.

Additional obligations apply when the SMSF is using a limited recourse borrowing arrangement and bare trust when borrowing to acquire the premises and consideration ought to be given to who the members of the fund are and what happens if they were to pass away.

One of the leasing obligations on SMSF trustees in the SIS Act is that there be a written Lease in place. Not only does there need to be a Lease in place, but it must be at ‘arms length‘ and on commercial terms.  This effectively means that it must have all of the usual or typical terms that would be expected to be in place if the property was being rented to a third party, for example with market rent being required to be paid in full and on time, with no discounts.

Practically, there are other benefits of having a proper Lease in place and one of them is that on the sale of the business, the Lease can be assigned to the purchaser so that the SMSF continues to get the benefit of the Lease and its protections after you cease to run the business. It also can assist your SMSF to maintain the value of the premises as any purchaser of the land is bound by it, so having a good yield is important.

FURTHER INFORMATION

For further information, please contact McKillop Legal on (02) 9521 2455 or email help@mckilloplegal.com.au 

This information is general only and is not a substitute for proper legal advice. Please contact McKillop Legal to discuss your needs.

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in Business / Commercial Law / Dispute Resolution / Estate Planning / General / Property / Risk management / Superannuation  by 01 Oct 2023 0 comments

Why your SMSF should have a corporate trustee

The Superannuation Industry (Supervision) Act 1993 (Cth) (SIS Act) has strict rules as to who must act as a trustee of a self-managed superannuation fund (SMSF), but basically this means:

  • if you are individual trustees of a SMSF, all members must be trustees of the SMSF
  • If you have a corporate trustee of a SMSF, then all members must be directors of it.

The SIS Act also provides that those trusteeship rules will continue to be satisfied if a member’s attorney (under an enduring power of attorney) is appointed as trustee/director in place of the member. This can also assist if you will be overseas and unable to tend to the management of the SMSF for a prolonged period.

Where there is no enduring power of attorney, the member may need to be rolled out of the SMSF or an administrator may need to be appointed by the Court. One consequence of breaking these trusteeship rules can be the ATO removing the SMSF’s complying status and triggering tax at the top marginal tax rate.

There are several important reasons as to why your SMSF should have a corporate trustee. So how can having a company as trustee be of benefit?

Individual trustee dies or becomes incapacitated

When a member who is a SMSF trustee becomes incapacitated or dies, the trustee/s will need to change.

On the death or incapacity of a member, typically the deceased/incapacitated trustee will be removed and replaced with their ‘legal personal representative’ (LPR). An example of an LPR is an attorney appointed an enduring power of attorney or executor under a Will.

Another complication is that when a member/individual trustee dies and their death benefit commences to be paid from the SMSF, the trustee/s will need to change again (as the LPR cannot continue to act in place of the deceased member).

Every change of trustee will need to be reflected on all assets of the SMSF (including updating the title to any real property), causing delay and expense to the SMSF and family, at a time when the family would rather be focused on assisting the debilitated member of grieving their death.

Death or incapacity of a director of a corporate trustee

Where there is only one member remaining in the SMSF (due to death or rollout of a member), the remaining member will not have to find a second person to act as co-director of the trustee (single member SMSFs are required to have 2 trustees if the trustees are individuals). Title to the SMSF assets does not need to be changed, although ASIC’s register will.

Reduced ASIC fees

The expense of registering and maintaining a company is the most common deterrent to SMSFs using a corporate trustee however, unlike being a trustee of a family, discretionary or unit trust, where a company only acts as trustee of a SMSF, it is a ‘special purpose company’ (meaning it will receive the benefit of reduced ASIC annual return fees.

Other benefits

Having a company act as trustee can also offer some litigation exposure protection and may assist with borrowing under a Limited Recourse Borrowing Arrangement as some lenders require it

Overall, having a corporate trustee can be a more efficient, cost-effective and administratively simpler option for your SMSF and can be an integral part of your overall estate plan.

FURTHER INFORMATION

For further information on estate planning, corporate, superannuation or succession issues, please contact McKillop Legal on (02) 9521 2455 or email help@mckilloplegal.com.au 

This information is general only and is not a substitute for proper legal advice. Please contact McKillop Legal to discuss your needs.

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in Business / Commercial Law / Estate Planning / General / Litigation / Probate / Risk management / Superannuation  by 01 Sep 2021 0 comments

Unpaid interns

Typically, unpaid internships offer a taste of what is usually involved in a job or industry, as well as the chance to network and to add practical experience to their resume.

Many businesses however seek to avoid paying lawful entitlements to employees by labelling them an “intern” or calling it a “vocational placement” or similar. In law firms (yes, they do it too), it’s a “law clerk”.

The fact is that if they are performing productive work for your business, they are an employee and are therefore legally entitled to be paid.

Before engaging an unpaid intern, business owners need to genuinely consider if the placement is providing them with work experience, a career opportunity and take steps to avoid the arrangement being considered exploitation. That is, are they really an unpaid employee?

To determine whether the arrangement is ‘employment’ ask yourself these questions about the proposed intern:

  1. Will they have actual responsibilities (as opposed to just observing)?
  2. Will their workload be similar to a paid employee?
  3. Will the intern replace a paid employee?
  4. Will the intern have administration duties?
  5. Will the intern collect coffee orders?
  6. Does your business rely on interns for ongoing duties?

If you answered “yes” to any of the above, they are assisting your business, not learning, so it is likely that your unpaid interns will actually be employees and hence entitled to minimum Award rates.

Even if you will genuinely have unpaid interns at your workplace, they should have a contract (although not an employment contract) covering that fact and requiring them to maintain standards such as confidentiality, returning company property at the completion of the placement etc.

FURTHER INFORMATION

For further information in relation to any employment related issue or any business/commercial law matter, contact McKillop Legal on (02) 9521 2455 or email help@mckilloplegal.com.au 

This information is general only and is not a substitute for proper legal advice. Please contact McKillop Legal to discuss your needs.

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in Business / Commercial Law / Dispute Resolution / Employment / General / Risk management / Superannuation  by 01 Sep 2020 0 comments

COVID-19: McKillop Legal remains open for business

McKillop Legal remains open for business and is fully operational despite the significant and unprecedented challenges facing our families, the Australian economy and our way of life as a result of the Coronavirus/COVID-19 pandemic.

We remain open for business and available to provide advice either by telephone, email or other services (and, if necessary, in person, abiding by the Government’s social distancing guidelines).

Our staff all have the ability to work remotely from home or in other places using our secure technology infrastructure and systems.

If you or your business has any legal issue it requires assistance with, whether relating to your rights or responsibilities relating to business, shutdowns or employment in relation to the pandemic or in relation to other matters, please call or email us and we will be in touch promptly.

Take care.

in Asset Protection / Business / Commercial Law / Debt Recovery / Dispute Resolution / Employment / Estate Planning / General / Insolvency & Bankruptcy / Intellectual Property / Litigation / Online Issues / Probate / Property / Risk management / Superannuation / Tax Planning / Trusts  by 23 Mar 2020 0 comments

Are you hiring an Employee or a Contractor?

Are you hiring an employee or a contractor? This is an important question often overlooked by business owners.

What is the difference between an employee and a contractor?

The difference between an employee and an independent contractor is based on many different factors. No single factor determines whether someone is an employee or a contractor. Instead, the Courts will look at each case and make a decision based on the totality of the relationship between the parties when determining the status of an engagement.

There are some common factors that may contribute to determining whether a person is an ‘employee’ or an ‘independent contractor’ (or ‘contractor’ or ‘sub-contractor‘):

Employees

Employees generally:

  • do not operate independently of the business engaging them
  • are directed in how and when to perform their work
  • cannot delegate their work to someone else or pay someone else to do it
  • are paid per hour, project or a commission
  • are provided with all tools and equipment required to perform their work or gets an allowance to provide these things
  • take no commercial risks – the business is responsible for the work performed or fixing any issues with it
  • have an expectation of continuing work (except casuals)
  • are generally not employed by other businesses at the same time (at least for most full time employees)

Contractors

Contractors on the other hand:

  • do operate independently of the business engaging them
  • have freedom as to how and when to perform work, subject to the terms of the arrangement
  • may delegate or further subcontract out their work, subject to the terms of the agreement (Services Agreement or Contractor Agreement etc)
  • are paid for a result or outcome, even if this is on an hourly rate basis, a commission arrangement or per project
  • supply most of their own tools and equipment
  • are liable for the work performed and are liable to remedy or pay the costs of fixing any defects
  • are responsible for their own employees and sub-contractors
  • are usually engaged for a specific task or purpose
  • may accept or seek work from other businesses

Other differences in their rights and the obligations or the employer or principal include:

  • Independent contractors issue invoices (or tax invoices if registered for GST) whereas employees are paid regularly (weekly, fortnightly or monthly).
  • Employees are entitled to the benefit of the rights under the Fair Work Act 2009 (Cth) (FW Act) and any relevant Award or industrial agreement (including for things such as leave, overtime etc) as well as having the compulsory superannuation contribution paid to their superannuation fund.
  • Employees have tax withheld and paid on their behalf to the Australian Taxation Office where as an independent contractor will pay their own tax to the ATO (and GST if registered for GST).

What if you get it wrong?

If you pay someone as a contractor when they are really an employee, the employee may miss out on important benefits such as leave entitlements and superannuation. Although you may have paid the agreed rates or price and any applicable GST, the employee may be able to pursue the business that engaged them for those unpaid entitlements and the employer may be prosecuted. Also, if the “contractor” doesn’t pay tax, the employer may be liable for the tax that ought to have been withheld.

Many businesses that deliberately arrange in “sham contracting” (where a person ought to be an employee but they are engaged and remunerated as a contractor) are penalized by the Fair Work Ombudsman under the FW Act.

Another unexpected consequence can be that where those engaged as independent contractors are not actually independent at all (for example where they do not provide services to any other businesses) or are really employees can be the issue of payroll tax payable to Revenue NSW under Payroll Tax Act 2007 (NSW). Contractors can be deemed employees for the purpose of payroll tax if they don’t offer their services to the general public, working only for one business.

FURTHER INFORMATION

Craig Pryor is principal solicitor at McKillop Legal. For further information in relation to any employment related issue or any business/commercial law matter, contact Craig Pryor on (02) 9521 2455 or email craig@mckilloplegal.com.au

This information is general only and is not a substitute for proper legal advice. Please contact McKillop Legal to discuss your needs.

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in Business / Dispute Resolution / Employment / General / Risk management / Superannuation / Tax Planning  by 01 Apr 2019 0 comments

Downsizer superannuation contributions

*The contents of this article are general in nature – as always, you should seek financial planning advice before doing anything to alter your financial position.*

From 1 July 2018, the Australian Government will allow “downsizer contributions” into superannuation as part of a package of reforms aimed at reducing pressure on housing affordability in Australia.

This measure applies where the exchange of contracts for the sale of your home (which must be your principal place of residence) occurs on or after 1 July 2018.

If you are 65 or older, and you meet the eligibility requirements, you may be able to choose to make a “downsizer contribution” from the proceeds of selling your home into your superannuation account for an amount of potentially up to $300,000.

Importantly, your downsizer contribution is not a non-concessional contribution and will not count towards your contributions cap, nor do the normal contributions rules apply, such as the “works test”.

Downsizer contributions are not tax deductible and will be taken into account for determining your eligibility for the age pension.

If you do not meet the “downsizer contribution” requirements, then the contribution will be assessed under the normal contributions caps (and penalties may apply).

If considering a downsizer contribution, you should also look to ensure that your estate plan is appropriate and if not, put appropriate arrangements in place.

From 1 July 2018, the Australian Government will allow “downsizer superannuation contributions”

ELIGIBILITY

You will generally be eligible to make a downsizer contribution to super if you can answer “yes” to all of the following:

  • you are 65 years old or older at the time you make a downsizer contribution (there is no maximum age limit),
  • the amount you are contributing is from the proceeds of selling your home where the contract of sale was exchanged on or after 1 July 2018,
  • your home was owned by you (or your spouse) for at least 10 years prior to the sale,
  • your home is in Australia (and is not a caravan, houseboat or other mobile home),
  • the proceeds (capital gain or loss) from the sale of the home are either exempt or partially exempt from capital gains tax (CGT) under the main residence exemption, or would be entitled to such an exemption if the home was a CGT, rather than a pre-CGT (acquired before 20 September 1985) asset,
  • you have provided your super fund with the downsizer contribution form, either before or at the time of making your downsizer contribution,
  • you make your downsizer contribution within 90 days of receiving the proceeds of sale, which is usually the date of settlement, and
  • you have not previously made a downsizer contribution to your super from the sale of another home.

HOW MUCH CAN YOU MAKE AS A DOWNSIZER CONTRIBUTION?

If you are eligible to make a downsizer contribution, there is a maximum amount of $300,000 that can be made.

The contribution amount can’t be greater than the total proceeds of the sale of your home.

It only applies to the sale of your main residence, and you can only use it for the sale of one home. You can’t access it again for the sale of a second home, but there is also no requirement to purchase another home.

TIMING

You must make your downsizer contribution within 90 days of receiving the proceeds of sale. This is usually at the date of settlement.

You may make multiple “downsizer contributions” from the proceeds of a single sale however:

  • they must be made within 90 days of the date you receive the sale proceeds (usually the settlement date of the sale), and
  • the total of all your contributions must not exceed $300,000 (or the total proceeds of the sale less any other downsizer contributions that have been made by your spouse).

If circumstances outside your control prevent payment within that time, you can seek an extension of time.

HOW TO MAKE A DOWNSIZER CONTRIBUTION

Before you decide to make a downsizer contribution, you should:

  • obtain financial planning advice in relation to the relevant requirements and any effect on your social security benefits or other entitlements (there may be other things to consider with any surplus sale proceeds such as acquiring a “granny flat right” and updating your estate planning documents),
  • check the eligibility requirements for making a downsizer contribution,
  • contact your super fund to check that it will accept downsizer contributions, and
  • complete a downsizer contribution form for each downsizer contribution and provide this to your super fund when making – or prior to making – each contribution

FURTHER INFORMATION

Craig Pryor is principal solicitor at McKillop Legal. For further information in relation to estate planning, business succession, superannuation or SMSFs, contact Craig Pryor on (02) 9521 2455 or email craig@mckilloplegal.com.au.

This information is general only and is not a substitute for proper legal advice. Please contact McKillop Legal to discuss your needs.

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in Asset Protection / Estate Planning / General / Property / Superannuation / Trusts  by 01 Jun 2018 0 comments

SMSF owns property. Member dies. Oh oh!

Do you, like many Australians, have a self managed superannuation fund (SMSF)?

If you want to own direct investments within your superannuation or have greater control of your superannuation portfolio, a SMSF can be a suitable alternative to retail superannuation funds.

SOME ADVANTAGES OF SMSFs

SMSFs have:

  • direct investment choice
  • access to wholesale managed funds
  • the benefit of being able to combine the superannuation balances of up to 6* people
  • the advantage of 15% taxation on investment earnings (as opposed to marginal or company tax rates) and potentially reduced capital gains tax
  • the ability to assist with estate planning and possibly for non-lapsing binding death benefit nominations

DIRECT PROPERTY

Often seen as a key advantage is the ability of an SMSF to invest in direct property, such as owning office or factory space from which a business operates from (assuming your SMSF’s Investment Strategy allows for direct property).

Where member balances are insufficient to buy a property outright, SMSFs can also borrow but only using a limited recourse borrowing arrangement (LRBA) using a bare trustee that holds the property on behalf of the SMSF for the duration of the loan and once the debt is paid, the legal ownership of the property passes to the SMSF.

Property values hopefully go up over the next 20 or so years and the members benefit from and can live happily off the benefits during retirement …

… well that’s the plan anyway. So, what happens if a member dies or gets really sick a few years into the plan? (hint – it can ruin everything, for the other members).

CONSEQUENCES OF DEATH OR TPD

On the death of a member, that member’s superannuation balance is to be paid out (to the member’s estate of their nominated beneficiary/ies) as soon as is practicable.

On the total and permanent disablement (TPD) of a member, the member may be able to exit from the SMSF and call for their member balance to be paid out.

… but if the SMSF’s cash is all tied up in the property and the property is still subject to the LRBA, where does the money come from to pay out the member balance?

The property may have to be sold to fund this! That is, unless there is a SMSF Member Death & TPD Exit Deed in place.

SMSF MEMBER DEATH & TPD EXIT DEED

A SMSF Member Death & TPD Exit Deed can help in reducing the financial effects arising from the unexpected death or TPD of a member by for example:

  • requiring the SMSF members to effect a life insurance policy over the lives of the other members and where there is a death and a payout under the policy, the policy owners contribute funds to the SMSF with the intention of paying out the deceased member’s superannuation balance (and using any remainder to reduce or pay out any debt on the property under the LRBA); and
  • requiring the SMSF members to either put in place appropriate TPD cover or to agree that on the occurrence of a TPD event of a member, that member may remain a passive investor in the SMSF but cannot immediately call for payment of their member balance, even if they would otherwise be entitled to under the superannuation legislation, but rather, if they want the payment, their member balance is to be paid out over several years (ie, from the SMSF’s cashflow).

Unless there are appropriate insurances in place or an agreement for members to only get paid out benefits over time in the event of a TPD event, then the likely outcome of the death or TPD of one member is the sale of the SMSF’s property.

This can be a particularly bad problem if the SMSF has only recently acquired the property and had therefore incurred all of the legal, financial planning and accounting costs as well as stamp duty, but had no time for the asset to generate income or appreciate in value. The death or TPD of the one member therefore affects up to 3 other members who may not even be related to the affected member!

FURTHER INFORMATION

Craig Pryor is principal solicitor at McKillop Legal. For further information in relation to estate planning, business succession, superannuation or SMSFs, contact Craig Pryor on (02) 9521 2455 or email craig@mckilloplegal.com.au.

This information is general only and is not a substitute for proper legal advice. Please contact McKillop Legal to discuss your needs.

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*amendment 01 July 2021 – only 4 members were allowed prior to 1 July 2021.

SMSF owns property. Member dies. Oh oh!

in Business / Commercial Law / Dispute Resolution / Estate Planning / Probate / Risk management / Superannuation / Tax Planning / Trusts  by 07 May 2018 0 comments

Superannuation Death Benefit Nominations

Did you know that on your death, your superannuation balance will not necessarily be dealt with in accordance with your wishes unless you have a valid beneficiary death benefit nomination in place. That’s right, your Will probably doesn’t have any effect as regards your super.

The trustees of most super funds have a discretion as to who to pay a benefit to and usually, the fund rules specify the member’s dependants as the class of beneficiaries to be considered first, with the trustee to determine the amounts/proportions.

Imagine what happens if you are separated (but not divorced) and you are living with another person (as a de facto) – a dispute could easily arise. What if you have children? What would/should the split be?

If you have no dependants, the trustee will likely pay it to your estate, but why take the risk? and does your Will adequately deal with that asset?

To minimise disputes and avoid applications to the Superannuation Complaints Tribunal or the Supreme Court of NSW, make a nomination. There are generally 2 types: Non-binding and Binding

NON-BINDING NOMINATIONS

A non-binding nomination is an indication to your trustee of your preferences but it is, as it states – non-binding so the trustee can ignore it. This can be a good idea if there are significant changes in circumstances before your death where you haven’t got around to updating your nomination. The trustee’s discretion could prevent it going to your ex or avoid the situation of you accidentally omitting one of your kids from a benefit.

BINDING NOMINATIONS

A binding nomination is exactly that – binding (provided that it is valid as at the date of death). There are 2 sub-categories of binding nomination: lapsing and non-lapsing.
  • LAPSING – Most funds provide for the lapsing type – these need to be renewed every 3 years or the nominations lapse.
  • NON-LAPSING – Some Self-Managed Super Funds (SMSFs) and some retails funds allow in their deeds for nominations that never lapse (unless you update it). Older SMSF Deeds and their Rules do not allow for the non-lapsing type and may need to be updated.

There are requirements for making any nomination legally valid, witnesses etc.

Speak to us about your estate planning and ensure your wishes are properly documented.

FURTHER INFORMATION
If you would like any further information in relation to superannuation death benefit nominations or updating SMSF deeds , please contact us on (02) 9521 2455 or email craig@mckilloplegal.com.au
in Estate Planning / Superannuation  by 01 May 2017 0 comments

Minimizing risk in your business

Running a business is risky and small businesses can be especially so. Minimizing risk in your business is crucial.

Often, SME owners put their own personal assets on the line, whether to borrow funds from a lender to start up or buy stock or equipment or by signing a guarantee in relation to suppliers and others for the debts of the business.

There are several methods of protecting personal assets from creditors, but it is a process that many don’t follow. Some are quite simple and easy to put in place. They include…

Placing assets in a spouses’ name or in a family trust

In most circumstances, creditors will not be able to make a claim upon assets owned by your spouse or held by a discretionary trust, provided that you are not the trustee. If your spouse is the trustee, then he or she is the person who will usually decide how to divide up the income or capital of a trust (or not to).

Of course, stamp duty and capital gains tax issues must also be considered before acquiring or transferring assets as well as the potential operation of claw back provisions. The loss of the principal place of residence CGT exemption or the land tax issues may be a factor weighing against doing this.

In the end, it is weighing up risk vs benefits and making an informed decision regarding any asset protection measures.

Encumbering assets if you cannot transfer them

An asset that is mortgaged to its value is not attractive to a creditor. The mortgagee in such a case is the only entity that will benefit from the subsequent sale of the asset.

A guarantee form a person without assets is effectively valueless. Often businesses don’t check to see what a guarantor actually owns.

If you seek a guarantee from a director of another business, you could make some inquiries about their credit/financial position before creating an account,

Correctly structuring your business

Sometimes it is not feasible to establish an asset-holding entity and a trading entity (as many small business start-ups are strapped for cash) but it can be a great way to protect the business assets from day to day trading risks. Even getting the type of business structure right from the beginning (sole trader, partnership, company, trust or combination etc) can have a massive impact on your business.

It is possible to establish a company with a single director  and/or single shareholder. The company dealing with third parties, supplies, customers and the like is the entity that may be liable to them, not the shareholders.

The shareholders are only liable to the company for the unpaid amounts (if any) on any issued share capital. This liability is usually a nominal amount such as a dollar. Shareholders have no liability to third parties unless they agree to it, such as by giving a guarantee.

Company directors may have some liability but only in limited circumstances can the corporate veil be lifted. Courts may be prepared to lift the veil in limited circumstances, such as in the case of insolvent trading, fraud or misrepresentation, inappropriate transactions or where public policy requires it.

Charging assets (and properly recording the charge)

Before lending money to your business, a charge should be created in the correct form and that form recorded as against assets such as real property (by way of mortgage recorded at Land and Property Information or another State’s land titles registry) or against non-real estate assets (by way of a Specific or General Security Deed and making a registration on the Personal Property Securities Register (PPSR)) to secure repayment of that money in preference to other creditors should the business fail.

Having proper terms of trade

Most businesses, if they have them at all, have terribly inadequate terms and conditions of trade. Often they are just copied and pasted from other documents and not tailored, leaving businesses thinking they are adequately protected when they really are not covered at all.

T&Cs should be built to protect your particular business and should be a work in progress, tweaked to solve or prevent problems that have arisen in your business from occurring again,

Avoiding personal guarantees altogether

A guarantee is a contract by which a guarantor promises that another person or entity will comply with his, her or its obligations to a third party and if they don’t, the guarantor will. The most common example involves bank loans where a guarantor such as a parent promises to repay the loan of their child if the child defaults.

Becoming a guarantor can be extremely risky, particularly when large liabilities are involved. Under most guarantees, the guarantor becomes immediately and primarily liable to repay the debt (and the lender does not have to wait for attempt to recover from the borrower before calling on the guarantee).

As a practical matter, many businesses cannot obtain finance unless a personal guarantee is provided. If this is the case however, whenever the loan is actually repaid or if the business can prove it is financial stable and secure, the guarantee should be discharged so that the guarantor cannot continue to rely on it at a later date concerning subsequent transactions.

Managing staff

One of the biggest risks to your business is that of staff leaving, and worse still, taking valuable information and assets with them.

Having appropriately drafted Employment Contracts with restraints of trade in them is a must.

Superannuation contributions

In many circumstances, superannuation entitlements can be protected from bankruptcy trustees. There may be no protection for example where the payments are made for the primary purpose of defeating creditors.

Making contributions to super is getting harder and harder with the Federal Government’s recent changes to the superannuation laws however, this can be an effective long term tool for wealth creation and asset protection. This will also usually involve the assistance of your financial planner.

Business succession planning

If you are in business with another person, what happens to your business if you or your business partner gets seriously injured or dies?

Do you have an appropriate and valid Will, Enduring Power of Attorney and Appointment of Enduring Guardians in place?

Usually having these estate planning documents is not enough. Presumably your business partner would give all of his or her assets to their spouse on their death through their Will. What if you don’t want to me in business with your business partner’s partner?

You should have in place business succession documents to deal with this such as a Buy/Sell Deed with appropriate insurances, a Shareholders Agreement (for companies), Unitholders Agreement (for unit trusts) or a Partnership Agreement (for businesses operating through a partnership structure).

FURTHER INFORMATION

Craig Pryor is principal solicitor at McKillop Legal. For further information in relation to starting a new business, commercial law, business disputes or estate planning/business succession issues generally, contact Craig Pryor on (02) 9521 2455 or email craig@mckilloplegal.com.au.

This information is general only and is not a substitute for proper legal advice. Please contact McKillop Legal to discuss your needs.

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in Business / Commercial Law / Dispute Resolution / Employment / Estate Planning / General / Insolvency & Bankruptcy / Online Issues / Risk management / Superannuation / Tax Planning / Trusts  by 03 Apr 2017 0 comments

Superannuation and your estate planning

Did you know that your superannuation does not necessarily form part of your estate when you die? This can cause problems unless it is properly dealt with as part of your Estate Planning.

Your superannuation will not be dealt with in accordance with your wishes (in your Will) unless you have a valid and binding beneficiary nomination in place. The trustees of most funds have discretion as to who to pay benefits to. If you have no dependants, the trustee will likely pay it to your estate, but why take the risk?

Take control of your superannuation death benefits and put in place a beneficiary nomination today.

To avoid applications to the Superannuation Complaints Tribunal or the Supreme Court, make a nomination – they can be binding or non-binding, lapsing or non-lapsing and require formalities such as 2 witnesses etc.

Speak to us about your estate planning and ensure your wishes are properly documented.

FURTHER INFORMATION

Craig Pryor is principal solicitor at McKillop Legal. For further information in relation to estate planning, business succession or any other commercial law matter, contact Craig Pryor on (02) 9521 2455 or email craig@mckilloplegal.com.au.

in Estate Planning / Probate / Superannuation / Tax Planning  by 14 Dec 2016 0 comments