What is succession planning? It is your plan for the transfer of wealth to the next generation(s) either in your lifetime or in your will.
THE 50S
The 50s are the decade in which you should put the basics in place. You should make a will and power of attorney.
Making a will gives you control over who inherits what, and when. If you die without a will, your estate is divided in accordance with a one size fits all set of rules and you have not chosen an executor to wind up your estate. There is also the default position that children inherit at 16. Making a will avoids these rules and gives you control and certainty.
A power of attorney names someone to make decisions for you if you lost capacity to do so yourself, such as through illness or accident. If you do not make a power of attorney and you lose capacity, then your family cannot access assets nor make decisions about your welfare until the court appoints a guardian and that can take time.
For those on their second or subsequent marriages, will planning can be done to protect assets and ensure they remain in your family.
THE 60S
You may now want to help your children financially but you need to think about the risks of doing so, being potential claims by your child if they divorce or separate. You can ask them to sign a pre/post nuptial or cohabitation agreement to ring fence assets. If that is not possible then instead you can make gifts not to your children but to a trust for them.
THE 70S
You may want to help your grandchildren get on to the property ladder. You should take advice about who owns the property – you/your grandchild/your family trust - as that impacts upon ownership and control.
If you inherit money from your own parents you can redirect that inheritance on to the next generation by varying their will. You can even vary your inheritance to a trust so you still benefit. This planning has to be done within two years after the death of your parent.
THE 80S
Planning should be done early but there is still planning which can be done later.
If you have a particular asset which you want to go to a particular child and are concerned that your other child would be disappointed by that, you could now legally transfer the asset to the intended child.
If you are turning your mind to making charitable gifts then you can set up your own charity to make donations to other charities in your name.
It is important to take control of your succession plan by putting the right measures in place. Please contact Leigh Gould below if you wish to discuss.
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