30 July, 2018 / IN Wealth management / by Scott Lucas
I had a long standing client’s son contact me and said “You know the plans Dad said were in place if something were to happen to him, well we need it now."
I had a long standing client’s son contact me and said “You know the plans Dad said were in place if something were to happen to him, well we need it now.”
Yes, my client was in hospital with a terminal illness and not very lucid.
My client was smart. He did have plans in place. He told me about them years ago and I was able to direct the son and spouse to where a Power of Attorney was held, that an Enduring Guardianship has also been documented and the Will was also with these documents.
My client ran a successful business as a sole director and also had a self managed superannuation fund. The superfund owned the business premises as well as other assets. The fund was in the process of paying an account based pension as my client was over the age of 65. The pension was a reversionary pension.
Due to the preparedness of my client, the son was able to step into the business and keep it going with management. He was able to execute relevant documents on behalf of my client. He was appointed a director of the trading company and with his Power of Attorney was able to take my clients position as the director of the trustee company for the superfund.
My client passed away very soon after.
The business continued with the son now as sole director. He was able to trade for a period of about 12 months and sold the business.
We then appointed the spouse and son as directors of the superfund trustee company.
The superfund’s pension was reversionary so the monthly payments continued to the wife so she still had income to live off. This income was tax free to her.
The business premises were also sold as part of the business. As the fund was in pension paying mode there was no capital gains tax payable by the fund.
Importantly, my client was also very smart in having appropriate documentation in place to allow for the smooth transition of management of his business and superfund. If he didn’t have this done it would have been very difficult for the family to take control of the business and there could have been lengthy delays in sorting the whole matter and this delay could have crippled the business entirely or disrupted the business sale. The financial difference for the spouse and family has ensured the spouse has sufficient funds to continue living in the manner to which she was accustomed.
Scott Lucas is a founding partner of Lambourne Partners and specializes in estate planning matters.