SUCCESSION planning is looming as one of the fastest growing sections of the financial planning area.
Recent scenes of the family behind engineering giant Transfield slugging it out in the courts show why some form of succession plan is needed.
Plan B estate planning manager Sabina Schlink said succession planning had only come to the fore in the past few years.
“Most family business owners often thought it was something that could be dealt with by their estate,” Ms Schlink said.
“In the 1980s there was often the scenario of two blokes running a business. They had to have four directors so they would enlist their wives.
“The wives knew nothing of the business so when their spouses died, they suddenly inherited an interest in the business.”
Ms Schlink said it was important business owners made a business will.
“The whole reason people go through estate planning is to lighten the load on grieving beneficiaries,” she said.
“In the old days people used to appoint a member of the family to act as executor of their estate. Now they are starting to employ trustees.
“Succession and estate planning is going to be a growing area because the baby boomer generation understands the role of the executor is a very difficult one.
“They are more commercially savvy and prepared to pay for professional advice because they know if they don’t get it right up front, the consequences are dire.”
Ms Schlink said many people thought documenting the family business arrangements would be an affront to their family.
“You can’t assume there’s not going to be conflict if a family member dies and the affairs are not in order,” she said.
“It makes estate planning very difficult and brings emotion into it. You should never isolate the fact that family members have lost a loved one.”
Then there is the grieving cycle to contend with when people experience feelings of sorrow and loss, guilt anger and resentment.
“It depends what part of the cycle you encounter people on,” she said.
