Succession Planning

Thinking of handing a business to the next generation?
How can succession planning ensure your wishes are acted upon?

A good succession plan will help your business transition smoothly to the new owner/s. By planning your exit early, you can also maximise the value of your business.


What is business succession and exit planning?
Why use an Accredited Adviser?
What do you need to know?
Is there capital gains tax?

Succession and Exit Planning is a business strategy designed for business owners to assist them in assessing the most appropriate (and valuable) exit options available to them and a individually designed succession plan for achieving their preferred outcomes.

3 Important Focus Factors of Succession Planning are:

Wealth management – Personal and family wealth management to fund retirement and your legacy;
Exit readiness – and the maximizing the value of your business;
Life after business – what you want your retirement to look like and peace of mind.

Planning for the day you leave your business is a valuable investment. A good succession plan enables a smooth transition with a clear plan. For most private groups and family businesses, succession (or transition) planning involves planning for the sale of your business or passing the baton to family members or business partner/s.

A succession plan should consider the following:
Examine the dynamics
Examine the barriers
And examine the success strategies that are appropriate and unique for your business/s.

Effective succession planning is a complex process that raises many potentially difficult emotional, financial, tax, legal and equity issues. so, without a succession plan in effect for both planned and unplanned events, your wishes, the value and the future of your business is out of your control.

If a succession plan is not in place in a family business or rural property, it could lead to a life of uncertainty, anger and resentment for all concerned. Passing on the management of business / farming assets to the next generation is often a complicated process.

Many families have trouble navigating the various financial and emotional road blocks along the way. In some cases, the older generation avoids even discussing the prospect of handing over let alone putting something of value in place for a successful transition.

You may be surprised, but lack of succession planning surprisingly common. Taking the first step towards succession planning is viewed by many business owners as the most difficult and delicate, let alone finding the time to think about what they actually want. One of the other common issues that arises in a family business/s is tension between the family and a new partner of a family member.

We, as Succession Planners and Estate Planning advisers see succession planning as an art of compromise, communication and managing expectations for you and the future owners.

A little fact: 99 percent of businesses in Australia are family owned and operated. Our advice on succession planning is; get it done early. Get it done up front and then go on with business. It doesn’t mean you have to split all the bank and other details immediately, that will be done at the appropriate time, and you can negotiate over time – it doesn’t have to be cut and dry up front.

FMG Wealth Strategists principle adviser is a specialist in providing proactive, focused and strategic advice for business owners in the area of succession planning.

As the ever-increasing numbers of baby-boomer business owners approach retirement and therefore exit their business, we say “A good result is where everyone walks away from the table and has a very clear understanding of what is going to happen over the next five to ten years and they all feel they’ve been respected and listened to and hopefully most of their needs have been addressed.

To find out more about business succession and exit planning, contact us.



Inter-generational Wealth Transfer.
If you want to be certain that your wealth doesn’t end up being another tale of ‘Shirtless to Shirtless’’ in 3 generations you need to take the topic of inter-generational wealth transfer seriously. Education of not only Quantative but just as importantly Qualitative factors are paramount to ensure your hard earned wealth doesn’t disappear in your children and grandchildren’s generation.

Small Business Tax Concessions Strategies.
Together with your accounting team we work towards maximizing tax benefits available on selling your business and investing appropriately.

Buy/Sell Agreements.
Through buy/sell funding, this agreement ensures a successful transition between owners of the business and ensures an adequate compensation in the event of death/disablement/trauma for all parties concerned.

A buy/sell agreement is a contract entered into between business partners to allow for the buy out the other partner’s interest in the business should a specific event occur. Events which may trigger a buy/sell agreement include death, trauma, long-term disability, retirement, bankruptcy or chooses to leave the business.

Succession Planning

Set up your buy / sell agreement well!
Generally, the buy-sell agreement is fully funded by the proceeds of a life insurance policy providing for the departing owner or his estate to be paid an amount equivalent to the departing owner’s interest in the business in the event of his/her death or total and permanent disablement.

In the case of a business carried out by a corporate entity, a buy-sell agreement may take the form of a cross-purchase agreement, where the continuing owners purchase the shares of the departing owner or a redemption agreement, where the company buys back and cancels the departing owner’s shares or in the event that the proceeds of the insurance policy are insufficient to meet the full purchase price of the departing owner’s shares, a hybrid cross-purchase/redemption agreement, where the company buys back and cancels any remaining shares not purchased by the continuing owner.

Ready to meet with us? Provide us with some details about yourself so we may prepare and get the most out of our first meeting.

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