Plan, plan, plan ... think of those loved ones you're leaving behind

BENJAMIN Franklin suggested that "nothing can be said to be certain except death and taxes."
We often spend a large amount of time concentrating on minimising tax and planning with little regard to the consequences that death may play.
Due to the nature of the topic we often procrastinate and put it in the "too-hard basket". Who wants to consider their own mortality? Yet, if you don't turn your mind to the situation, then it can leave a mess for surviving spouses, families and business partners.
Continuously reviewing and updating one's Will, Memorandum of Wishes and Powers of Attorney are crucial. When did you last look at these?
These items need to be updated for various reasons including marriage, divorce, starting a new business, or when trustees have died, to name just a few.
Are you adequately insured? An insurance payment is the sacrifice now for spending (cash) at a later point.
Whilst nothing can replace an individual, having sufficient funds to cover your family's needs can alleviate some of the stress associated with a death.
Insurance brokers in conjunction with your accountant should be able to determine adequate assurance requirements.
This could include cover for such areas as repayment of debt, the ability to employ a manager in the business, sickness and accident cover, and to facilitate a succession or exit plan.
It is also important to design and use the best business structure for your needs. The structure that is chosen and required can depend on many factors.
These include, but are not limited to the need to protect assets, minimise taxation, smooth exit and succession planning, and promote ease of operation and management.
There may be a trade-off required in dealing with the above choices.
Your accountant will need to take into account many different facets including your age, type and stage of business, cycle of business, the level of complexity one can handle, and costs in setting up and maintaining a structure.
Therefore an in-depth review would need to be undertaken in regard to the most appropriate structure for your needs.
The items mentioned above cannot be considered without thinking of the human dimension involved in all decisions. Family considerations can overwhelm business realities.
The majority of businesses in New Zealand are family businesses and as such succession and exit plans normally involve one or more children or grandchildren.
The equitable treatment of offspring can determine how one's affairs are dealt with and structured.
Some children have expectations in relation to the allocation of business and private assets when an estate is to be dealt with.
One issue for families is how to deal with your estate equally and equitably.
An example of this is a farmer having the dilemma of facilitating a successor on to the farm and to be fair to non-farming children.
Being open and even facilitating a family meeting involving your professionals prior to death can help to smooth the transfer of assets once you are gone.
Having all family on the same wavelength and minimising surprises will keep the family dynamics happier long after you have gone - versus dissension and division among remaining family members without such communication.
Plan, plan, plan. Think of those that are left behind and put structures and legal documents in place for a smoother transition.
Disclaimer: No liability is assumed by Staples Rodway Tauranga Ltd for any losses suffered by any person relying directly or indirectly upon the article above. It is recommended that you consult your advisor before acting upon this information.
Fiona Welten is from Chartered Accountants, Staples Rodway Tauranga.