Trust and company succession

If you have a trust or a company, it is important to understand that assets held in those structures will not always be dealt with under your Will.

Instead, a variety of issues must be considered to properly understand how control of those structures pass upon various events occurring (such as death or lose of capacity of a controller).

Depending on the intentions relating to the succession of such entity, simple or complex succession plans can be drawn and prepared in relation to each entity.

Understanding the complexity of such plans will also depend on the current circumstances which would require a proper understanding of the governing rules of the entity and the financial circumstances.

An overview of the relevant issues to be considered regarding the succession plan of a trust or company is provided below.

Trust succession considerations

  • Who takes control of the trust if you pass away or lose capacity?
  • Who do you want to take control of the trust?
  • Does the trust document state who the successor controller is?
  • Are there multiple roles that can control the trust?
  • Is there provision in the trust document enabling a successor to be nominated?
  • Can the successor be nominated by Will?
  • Can you update the trust document to include broad provisions to reflect your estate planning intentions?
  • Can you update the trust document to hardwire specific beneficiaries or controllers?
  • How are multiple controllers to act?
  • Is a particular asset intended to be set aside for a certain beneficiary?
  • Company succession considerations

  • Shares can only be dealt with under a Will if an individual owns the shares in their own right (i.e. not as trustee).
  • Who should take control of company if the shares in the company are held by a trust?
  • Does the company constitution or shareholders agreement outline a successor director?
  • Are the provisions in the company document restricting who may be a shareholder of the company?
  • Can the company constitution be updated to embed a successor director if you were to pass away or lose capacity?
  • Can strategies be implemented to ensure particular assets in the company pass to specific recipients?
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