Very often we speak to business owners that are successful in business but may not of received the correct advice or current advice around areas outside their business which include:
Below is a typical case study that we see with Business Owners with where they are currently exposed and how we provide a holistic solution.
The Thompson family includes William (65 years old), Lisa (63 years old), and their daughter Megan (35 years old). They live in Brisbane, Australia. William owns a successful manufacturing business, valued at AUD 12 million. Other assets include their family home, a holiday house, shares, and cash savings. Their combined net worth is approximately AUD 15 million.
William and Lisa have been contributing to a retail superannuation fund but they lack control over their investment strategy. The majority of their wealth is tied up in the business, and they have simple wills leaving everything to Megan.
1. Exposure to business risks could affect their personal assets.
2. Inefficient tax management could erode their wealth.
3. Lack of a succession plan for their business and personal assets.
4. Limited wealth creation strategies due to lack of control over superannuation.
William and Lisa establish a Leading Member Family SMSF and start maximising their concessional and non-concessional contributions. This puts their superannuation savings into a lower-tax environment and gives them greater control over their investments. They also plan to add Megan to the Family SMSF so she too can have greater control over her investments and have access to better investment opportunities.
They transfer ownership of their business to a Family Protection Trust. This protects the business from personal creditors and allows the income to be distributed in a tax-efficient way among family members.
For succession planning, they put a business succession agreement in place, with Megan slated to take over the management of the business. Also with Megan being part of the Family SMSF, it enables more tax effective and protected way of passing down the Family Wealth accumulated within super.
William and Lisa revise their wills to include a Testamentary Trust for Megan. Upon their death, the trust will provide a tax-efficient, protected inheritance.
The Family SMSF invests in a diversified portfolio, including shares, bonds, and real estate, which aligns with their risk tolerance and retirement goals. They also use the SMSF to purchase a commercial property which is leased to their family business, providing steady rental income to the Family SMSF.
Upon retirement, William and Lisa transition to a pension from their Family SMSF. The income generated by the Family SMSF provides for their retirement needs, while the capital continues to grow.
The succession plan sees Megan assume control of the family business, while the Family Protection Trust and Testamentary Trust ensure that the business and other assets are smoothly transferred and protected.
By employing strategies of asset protection, succession planning, protective estate planning, and wealth creation using a Family SMSF, William and Lisa have safeguarded their assets, planned for a smooth transition of their business, established tax-effective estate planning strategies, and positioned themselves for a comfortable retirement.
Financial services are provided by SMSF Wealth Pty Ltd ABN 57 663 011 309 which is a Corporate Authorised Representative 1304606 of SMSF Wealth Licensing Pty Ltd ABN 93 663 532 312 AFSL 547749
Disclaimer: The information and any advice contained on this website is general in nature and does not take into account the objectives, financial situation or needs of any particular person. You need to consider whether the information is appropriate to your needs, and where appropriate, arrange an appointment to seek professional financial advice from a financial adviser prior to acting on this information.
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