Tag Archives: Estate Planning

Retiring From Small Business

Retiring From Small Business

Selling a small business can be a challenging, complicated and uncertain time. So too can retiring. Combine the two and you have a situation where early planning and advice is critical.

Retiring From Small BusinessPlan early

The earlier you plan for the sale of your business, the more value you are likely to gain. Selling a business can take up a lot of your time but so can addressing the day-to-day demands of running your business. Trying to do too much of both at the same time can often mean you don’t manage either properly.

There is a range of things that may need to be addressed early on with the assistance of your adviser, accountant or solicitor. Key examples include:

  • ensuring the financial accounts are in order
  • obtaining a valuation of the business
  • determining the potential tax implications if the business is sold
  • considering whether the business should be restructured before the offer for sale,
  • and preparing or amending the legal and/or other documentation to facilitate the sale

Manage capital gains tax

When you sell your business, you may be eligible to claim certain capital gains tax (CGT) concessions. For example, you may be able to disregard 100% of a capital gain made on the sale of your business if you:

  • have owned the assets for a continuous period of 15 years or more
  • are at least 55 years of age, and
  • are disposing of the asset for retirement purposes or are permanently incapacitated

Alternatively, if you don’t meet the above conditions, there are other concessions that you may be eligible to use that could reduce or eliminate any taxable capital gain on the sale of your business.

It is always best to seek advice early to determine the CGT implications, whether the small business concessions will be available to you and which ones should be claimed.

Maximise super contributions

If you are like many small business owners, you have probably used most of the profits from your business to service debt and/or fund the next growth stage, which means you may not have been able to make maximum contributions to your super. Fortunately, following from the sale of your business, there are strategies that you may be able to use to get some or all of the sale proceeds into super and generate a tax-effective income to meet your living expenses in retirement.

Depending on your circumstances, you may be able to contribute up to $1.615m* from the sale of your business into super in 2021/22. What’s more, the money won’t count towards the concessional or non-concessional contribution caps that would ordinarily apply when contributing to super.

A financial adviser is the best person to help you maximise your super contributions using your sale proceeds. We can liaise with your accountant to ascertain which small business CGT concessions will be claimed and help formulate a contribution plan that takes advantage of the available contribution caps.

Address other advice issues

While boosting your super would be a top priority, there are a number of other issues you may need to address when it comes to selling your business and planning for retirement. For instance, you may need to:

  • decide where to invest sale proceeds that can’t (or shouldn’t) be put in super
  • unwind or reassign business insurance policies, such as those used to fund a Buy-Sell agreement
  • pay-off business loans and release guarantees
  • deal with business property that may (or may not) have been held in a self-managed super fund
  • review your personal insurance needs to ensure you are suitably covered, and
  • facilitate, with legal advice from your solicitor, any changes that may need to be made to your estate planning

Are you ready to start planning how you will exit your business? Reach out to the JBS team so we can assist you with your unique circumstances. Contact us to get started here.

*Source: Australian Taxation Office

It's not just about your will

It’s Not Just About Your Will

By Jenny Brown – CEO and Founder

When we look at Estate Planning, the first thing that pops to mind is our Wills. After all, these legal documents dictate what will happen to our assets when we die. While this is a good start, you will more than likely have assets that are not covered by your Will and will need to be dealt with in a separate manner.

Jointly Owned Assets

It's not just about your willThere are 2 ways to structure jointly held assets and both are treated differently for estate purposes. The first and more common way is what is known as ‘Joint Tenants’. In this scenario, if you were to die, the asset automatically goes to the other owner. For example, a husband and wife purchase a house as joint tenants, if the husband were to die, the wife would now own the entire house. It does not form part of his Will.

The second ownership structure is what is known as ‘Tenants in Common’. In this scenario the 50% (or whatever % you own) is not automatically passed over to the other owners, it does form part of your Estate and will be distributed through your Will. For example, 2 business owners purchase a commercial building 50/50 as tenants in common. If one were to die, their 50% would go to their estate and as an example end up being owned by their partner. Now there may be an agreement in place where the surviving business owner then buys the other persons share from their partner, however the partner does now own the 50% rather unlike a ‘Joint Tenants’ situation where the surviving owner would automatically be allocated the other 50%.

Assets held by Private Companies or unit trusts

Sometimes a person has assets held by a company that he or she owns. The person may own all the shares in the company and might be the only director of the company, and in so doing is able to use and enjoy the assets. Whilst the person might own the company, it is the company that owns the assets. Thus for example the person cannot in their Will give away the company car because they don’t own the item. It is a common mistake by business proprietors that they forget that assets they use personally are not theirs but instead belong to the company.

The only asset that the Will maker has is the ownership of the shares in the company, not any specific assets of the company.

Units in a unit trust are similar to companies in that any units owned by you, not the assets owned by the trust, will pass to your estate to be distributed as per your Will.

Assets held in Family Trusts

Assets held in a Family Trust are governed by the determinations of the trustee of the trust and are not assets owned by the person who set up the trust and transferred assets to it. Such a person is unable in their Will to distribute the assets of what they might regard as “my trust”. Control of the trust post the death of the person might be capable of being governed by the Will, but the assets themselves are not the person’s to give away in the Will. In the event of the death of a trustee (where it is an individual trustee), the appointer will need to nominate a successor trustee.

Life insurance

When you set up a life insurance policy you may also nominate a beneficiary. Generally, the proceeds of a life policy are paid directly to the beneficiary, without any need to be included in a Will.

If you wish for your life insurance benefits to be controlled by the terms of your Will then you need to nominate your estate as the beneficiary of your policy. A lot of life insurance policies are owned by superannuation funds with the proceeds being paid into superannuation. This brings us to the next asset.


When dealing with superannuation assets you have the ability to nominate to the superannuation trustee to who the funds will be passed on. If no nomination is made then the superannuation trustee will distribute the funds according to their formula. It is therefore essential for you to make a nomination however most superannuation funds have two types of nominations available to you.

The first kind of nomination is a non-binding nomination. This is more of a suggestion to the superannuation fund of where you wish for your funds to be paid. The superannuation trustee is under no obligation to pay your super benefits as per your nomination and instead will try to contact all possible beneficiaries (spouses, kids, dependents etc) and for them to put forward their case on why they should receive any benefit.

The second kind of nomination is a binding nomination. This nomination instructs the superannuation trustee on where they need to pay the money. Note that this is an instruction and not a suggestion and the trustee is obligated to follow it. There are rules however on who can be nominated on a binding nomination as only ‘dependants’ (spouse, children, financial dependents) or your legal personal representative (your estate) can be nominated. Because of the absolute certainty of this nomination, a lot of binding nominations only last 3 years at which time they expire and will need to be renewed. There are some superannuation funds however that do offer non-lapsing binding nominations.

With both nomination types, once the trustee has made their decision it cannot be contested, unlike a Will. Therefore it is essential that it is set up correctly to ensure your funds are passed onto your preferred beneficiaries.

We often only think about our Wills when it comes to Estate Planning however when probably our 2 greatest assets, properties held jointly and our superannuation funds with any life insurance proceeds are not covered by our Wills we need to make sure the proper procedures are in place to ensure they are passed onto our preferred beneficiaries.

If you would like to talk to someone to ensure that your estate planning is adequate and in place to cover all of your assets, please reach out and discuss your situation with the JBS Financial team. 

Why a Will…Peace of Mind!

While it’s said that most retirees like to SKI – Spending the Kids Inheritance, the real fact is that you might actually pass away before that last dollar is spent.  And if that happens, what’s going to happen with that dollar of yours?

Most of us would hope that it goes to our loved ones but sometimes the reality is that it goes towards unnecessary legal costs or is even given to family and friends that it shouldn’t have. That’s why you need a Will.

While we all know we should have a Will, about 45% of us don’t have one and those that do might actually be surprised to find that their Will doesn’t meet current legal requirements, effectively making it void.  Did you know that if you die without a valid Will, then your assets are distributed according to a legal formula and doesn’t give you any control over who does the distribution?

This might mean that the money you have saved up in your bank account for that big round the world holiday, that you didn’t quite get to enjoy before you kicked the bucket, could be going somewhere you don’t want.  Like being used for legal costs then distributed to your estranged (horrible, jail frequenting) brother, or your unknown sister from a polygamous father, or even possibly an ex-partner if you’re not careful.

Having a valid Will in place makes sure that what you’ve got, goes to who you want, when you know what happens.  But a Will should form part of your overall estate plan, because there are other things to consider, like your superannuation assets.  Did you know that if you have a Binding Nomination on your super, it doesn’t pass through your Estate/Will?  Or you can have a Power of Attorney while you’re still alive?

So why haven’t you got a Will?  Yeah it might cost a bit but it will cost a lot more if your friends or family have to fight an estate claim from people that shouldn’t have got what they got.  And if you’ve got one, when did you review it last?  If hammer pants were in when your Will was drawn up, it may be time for a review!  While your personal circumstances or your wishes may not have changed, legislation around estate planning and Wills may have.

A Will can give you great peace of mind knowing that things will be taken care of how you want but more importantly, it puts your loved one at ease that everything is set up correctly so they can get on with their grieving (and I’m sure not partying) when you’re gone.

You can get a simple Will kit at the post office but really you should see a solicitor to get one done properly.  Contact the team at JBS and we’ll be happy to provide a referral for you and help facilitate the process.

The problem with dying….

No one likes to think about that point where they’ll eventually kick the bucket but it is a definite so you might want to plan a little for it.  And while most of us think that assets like superannuation would just go to our partner, this might not be the case if you don’t have it appropriately documented.  This is particularly important if you hold an SMSF as the rules that apply here, can really override common sense.

A case from the Supreme Court (Ioppolo & Hesford v. Conti) in 2015 highlights just how important it is to get your affairs in order.  What happened in this case was that Mrs Conti died and while she had, in years gone by, nominated her husband as beneficiary to her superannuation funds held in their SMSF, these had lapsed.  She did have a valid Will in place that clearly stated that her children were to be the only beneficiaries of her super and not to include her husband in any distribution of funds.  When she died, her husband as a trustee of the SMSF, decided to pay out her balance to himself and therefore the children challenged this in the Supreme Court.  Unfortunately for the children and poor deceased Mrs Conti, the court upheld Mr Conti’s decision to pay himself benefits as the trust deed confirmed that if a valid binding nomination wasn’t held, then remaining trustees have discretion over the distribution of member benefits from the SMSF.

So what can this case teach us?  Simply, to get our estate planning affairs in order.  That might mean reading and understanding the terms of your SMSF trust deed, establishing binding death benefit nominations, a non-binding death benefit nomination, a Will and Powers of Attorney.

Don’t really know what this means?  Well, a binding death benefit nomination is when you have a legal document held by your super fund that you complete, sign and have witnessed that compels them to hand out any superannuation benefits when you pass to those people that you want.  It’s almost set in stone so they can’t choose to pay themselves or anyone else just because they wanted to.  Having a binding nomination is the best tool in your estate planning strategy as it is very hard to distribute your assets to people not nominated.

A non-binding death benefit nomination is a signed document held by your super fund that gives the trustee an idea of how you want your super distributed when you croak it, but they don’t have to follow it.

Your SMSF trust deed will be referred to if you don’t have a valid nomination on file which generally refers the decision of distribution of benefits to the remaining trustees.  While this might be fine now because life is rosy with your husband/wife/partner, if you don’t keep all your estate planning measures up to date all the time, you might find that ex-partner gets all your money when you’re gone.  The case listed above highlights that a Will may have no power over how the benefits are paid when coming from an SMSF with a valid trust deed.

Your Will is best drawn up by a lawyer who can make sure that you’ve got everything written correctly, and structured correctly to make sure your wishes are carried out.  A Will can be contested, meaning someone could go to court to say that they think your dosh should be distributed differently.  You should note that if you have a binding death benefit nomination, your superannuation doesn’t form part of your (estate) assets that would be distributed under your will.  This means that it could be given out quicker and it’s harder to contest.

If you’re unsure of how your superannuation will be handled when you die, it’s best to speak to a professional who can help you review your estate planning needs, and JBS are here to help! You can contact the team here…

The Importance of Having a Will

Wills aren’t just for the sick or wealthy, if you’ve got a family, a home or investments you definitely should have one – especially if the asset is only owned by you. Your will is your voice after you die and can be drawn up to provide guidance around who gets what and the person in charge of the distribution process.Wills & Estate Planning


Dying without a will (intestate) leaves the decision to a judge. Your assets will be distributed by the law of the state where your property is located, regardless of what your wishes were. It could mean that your minor children could be awarded to someone not of your choosing.


If you have minor children, your will should name a guardian for them.  If your children are a little older and perhaps living with partners but not married; the court may deem their relationship to be “de facto” and their partner would have claim to your estate, even if they separate.  Testamentary trusts can assist with greater levels of protection for de facto and other relationships.


If you have a more complicated estate, you may want to consider a trust which can provide much greater levels of protection, control and tax effectiveness.  You should provide your lawyer with clear instructions on how to change the ownerships on your accounts or changing the deed of your assets to reflect your newly created trust.  For example, with a testamentary trust you could give your spouse the annual income from an investment property you owned but at the same time ensure the asset ownership passes to your children.


Trusts can also be useful to stagger an individual’s inheritance over time.  We all know of or have kids who are not the most responsible when it comes to having large amounts of money in their possession.  You could setup your trust to pay various amounts of the inheritance at ages 21, 25 and then 30, or you can tie the release of your assets to particular events, such as marriage, purchasing a house, education or overseas travel.


Having a lawyer draw up a will should generally cost about $500 to $1000. Your “will” should clearly state who gets what’s left to your estate.  Accounts with beneficiary designations (Property, Superannuation, Insurance and Investments) are typically distributed (or assigned) prior to “the reading of the will” – so it’s possible that very little could be left to your estate.  Nevertheless, dying with a will insures that any leftover assets will be awarded to the person or entity of your choice.


JBS can refer you to an appropriate solicitor who specialises in estate planning matters.




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