Business Succession

What is Business Succession Planning for Business Owners?

If you're wondering what is involved in succession planning for business owners you have come to the right place. Ascendia has all the answers and guidance you seek. 

Who has Control of your Business in the Event of your Death?

Your interests in businesses, companies and trusts must be taken into account in your estate plan to ensure that it is as comprehensive as possible.

While some people perceive this as an attempt to rule from the grave, this is not necessarily the case. Rather, it is a matter of ensuring that ownership and control of your businesses passes in accordance with your wishes.

Consideration of your Will in isolation is unlikely to result in an effective implementation of your business succession wishes, this is especially the case where your business affairs involve trusts and companies and shares owned by individuals or entities other than yourself.

Is My 'Will' Enough to Transfer My Business?

Many people assume that all they need is a will, and that their will covers everything.

However, your will only covers:

  • Assets (including money) that you hold in your own name (or in the case of real estate, as a tenant in common); and
  • Assets that are paid or transferred into your estate after your death, such as life insurance and superannuation proceeds.

You do not own the assets held by a company or trust, as those assets belong to that entity. They are therefore not part of your estate and are not covered by your will. 

If your business is owned by a company or trust, you cannot deal with the ownership of that business after your death just by using your will.

What Documents Matter for My Estate?

Your estate plan (as opposed to just your 'will' document) outlines what you want to happen to the business and related arrangments and assets, after you die.

This estates plan needs to deal with a range of legal documents and issues that have resulted during the life of the business, including:

  • Company consitutions
  • Shareholder agreements
  • Loan agreements
  • Mortgages
  • Fixed and floating charges
  • Balance sheets of companies
  • Trustees appointed
  • Appointers of your trusts
  • Provisions in your trust deeds etc.  

Your 'Will' alone is not legally able to deal with all these issues. As a result many issues often get left to become legal problems on the death of the previous business driver.

For instance, it is true that if you hold shares in a company or are owed money by a company or trust, those shares and that money are your assets. Those assets will form part of your estate and can be covered in your will. 

However these assets may be impacted by a Shareholder Agreement or Company Consitution or other legal document or situation related to the business or financial affairs of the business. For instance, there may even be specific provisions in the trust deed or company consitution dealing with what happens on your death to any equity/rights you previously controlled or owned. If you have a right of appointment of a trustee of a trust, this is a right that you have that on your death may be dealt with by the trust deed.  

As a result, business succession planning for business owners is unfortunately not as simple as making or updating a will. 

For effectively implementing succession planning, we have to:

  1. Use the assets, and
  2. Related business and legal documents that govern these assets and rights in combination.

For instance, it is very important to start by carefully checking the provisions of relevant documents such as:

  • Company constitutions
  • Shareholders agreements
  • Trust deeds
  • Loan agreements

as these documents could contemplate an outcome that is different to what is in your will.

Organising legal documents to effect a business succession requires the review, and where necessary, amendment of the related business documents. This is very important to ensure accuracy and consistency and prevent any possibility of legal contradiction which could result in a failure of your business succession plan without the need for legal intervention and potential legal disputes.

Control of Assets - Companies and Trusts


Generally, your position as a director of a company automatically ends when you die or become mentally incapacitated, but the company, being a separate legal entity, continues to exist.

This can be particularly relevant for companies with only one director, and it is often for this reason that companies should themselves make a Power of Attorney to ensure that the company (and its business) can continue to operate, even if only to wind up its businesses in an orderly fashion, if the director dies or loses capacity. A quick and smooth business transition can be critical in maintaining the value of the company, as well as retaining staff and customers.


Trust deeds usually identify a particular person who has the power to change the trustee. The person who has that power is often referred to as the principal or appointor, and it is that person who has the ultimate control of the trust. It is very important that the trust deed is checked to determine what happens if the principal/appointor dies or loses capacity.

The trust deed may even need to be amended or updated. Very commonly, a trust deed will provide that on the death of the principal/appointor, their powers pass to the executors of their will.

Choosing the Executor(s) of Your Will and Powers Of Attorney

The moment a person dies, all of their estate (including, for example, shares in a company) passes to the executors of that person's will. An executor's role and powers also commence immediately upon the will-maker's death.

This will often mean that your executors will take control (either directly or indirectly) of businesses owned by a company or trust after you die.

Having a succession plan in business is important as it records your wishes as to what you want to happen to your business in the event of your death. While your wishes are not binding on your executors, they will provide a guide as to how your executors should exercise the control that is conferred on them. Ultimately, you need to appoint executors you trust to give effect to your wishes, even if they are not bound by them.

With that in mind, one of the most critical decisions in a comprehensive estate planning for business persons, or persons with significant ongoing investments, is determining who the executors will be.

Also important is determining who your enduring attorneys are and who the company's attorneys will be. Very often, they are the same people. Identifying what actions you can take during your lifetime to assist your attorneys to effect your wishes, such as providing confidential directions and wishes, is also very important in creating effective strategies for succession planning.

There are ways, using confidential directions to attorneys and executors, that you can introduce and implement business succession strategies that cover not only a planned retirement, but also an unplanned death or loss of capacity.

Why Bother?

Dealing with corporate structures and business arrangements in a comprehensive way as part of your estate plan will ensure that there is not only a quick and smooth transition upon your death or incapacity, but that the value of those structures is maintained and enjoyed in the manner you wish.

The value of a business is often a heavily impacted by how orderly and stable that business is.

In addition a comprehensive business succession plan will minimise the likelihood of legal intervention and the related costs eroding the value of the estate and business.

Legal intervention can be a very emotionally stressful process for beneficiaries who may be relying on the economic value of an estate or relying on employment from a related business.

Can Ascendia  Assist with your Business Succession Planning?

We routinely work with our business clients to ensure that their structures are appropriate for their circumstances and are in fact considered as part of the Estate Planning process. If you'd like to discuss business succession planning for business owners is a critical task that should not be left until the last minute.

If you'd like our expert guidance, advice and support to help you create an effective succession plan for your business, please contact us by calling one of our offices in North Lakes, Maroochydore or Noosa.

We're here when you need us.

To request an appointment with an Accounting, Law or Investment Client Service Manager, please fill out the form or Call: 1300 797 858.

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