Family Business Succession Planning: Key Considerations for Your Will
- Future Accounting
- Sep 1
- 4 min read
Can your Will alone handle the complexity of family business succession planning?
When a family business owner is planning, it’s not just about passing on personal assets via a will - it’s a critical step in family business succession planning. The decisions made now will shape future leadership, family harmony, and even the financial stability of future generations.
To help you get it right, here are the key things to consider when building succession agreements, estate plan and Will as a business owner.
Who will take over the business?
One of the most important parts of family business succession planning is deciding who will lead the business, and who will own it. These are not always the same person.
Make sure you choose successors based on capability, not just family ties or birth order.
Clarify the difference between management and ownership - unclear succession plans are a common cause of disputes.
Consider whether it’s best for one child to run the business while others receive different assets, such as property or investments.
Planning tip: Align roles with each other’s strengths and involvement. This keeps the business strong and the family dynamic healthy.
Equal vs. fair distribution
Fair doesn’t always mean equal. This is especially true when not all children are involved in the business.
Equal ownership can cause friction if only one sibling is actively contributing.
A fair approach might give business control to the child who runs it, while others receive non-business assets.
Real-life example: Three siblings inherit equal shares. One manages the business full-time, while the others contribute nothing but expect dividends. This often leads to resentment and tension.
Understanding your business structure
Family business succession planning must align with how your business is legally structured.
Is your business a company, trust, partnership or sole trader?
Assets held in trusts or companies usually can’t be gifted through a Will alone.
Control may instead transfer via shareholding or the appointment of successors under trust deeds.
Important: Many business owners assume they can simply “leave the business” in their Will - but without legal alignment, that won’t work. Professional advice is essential here.
Estate planning beyond the Will
Your Will is only one part of a strong succession plan. Consider these supporting documents:
Enduring Power of Attorney - to appoint someone to make decisions if you become incapacitated
Business Succession Agreement
Buy-sell agreements - useful in partnerships or co-owned businesses
Shareholder agreements - which may override your Will if not reviewed
Pro tip: A comprehensive plan ensures smoother transitions and fewer surprises.
Tax implications to consider
Passing on business assets can trigger taxes like Capital Gains Tax (CGT) or Division 7A issues in private companies.
Work with Future Accounting to explore options like Small Business CGT concessions or testamentary trusts to help reduce tax.
Make sure your legal and accounting advice are aligned to protect both your beneficiaries and the business.
Minimising risk of family disputes
Even the most carefully written Will can be contested - especially if someone feels they’ve been treated unfairly.
To reduce this risk:
Document your reasons for key decisions
Consider creating a family constitution or binding financial agreements
Use testamentary trusts to offer long-term control and protection
Remember: The more transparent and well-prepared your plan is, the less chance of a dispute down the track.
Don’t forget contingency planning
What happens if your chosen successor can’t take over due to illness, death or departure?
Include clear backups in your Will and succession documents
Communicate your plans with your family and key stakeholders while you’re still active in the business
Why it matters: Surprises after your passing can cause delays, legal issues, or conflict. A backup plan ensures your wishes are respected.
Summary at a glance
Area | Key consideration |
Business continuity | Who takes over? Are they capable? |
Ownership vs. management | Are they the same person(s)? Should they be? |
Fairness vs. equality | How will non-active family members be treated? |
Legal structure | Can you even gift the business in the Will? |
Tax | Will there be CGT, Division 7A or estate tax issues? |
Family conflict | Are you reducing or increasing the risk of a dispute? |
Backup plans | What happens if things don’t go to plan? |
Take the next step today
Family business succession planning isn’t just about protecting your wealth - it’s about safeguarding your legacy and supporting your loved ones well into the future.
We’re here to help you create a Will that truly reflects your wishes and secures the future of your business.
Book your planning appointment with us today - and take the next step toward peace of mind.
Disclaimer
This article does not constitute financial advice and is for general information only. It does not take into account any individual’s personal objectives, situation or needs, and is not intended as professional advice. Any similarity to an individual’s personal circumstances and the examples provided in this article is purely coincidental. Any person acting upon such information without receiving specific advice, does so entirely at their own risk.
Authorisation under an Australian Financial Services Licence (AFSL) is not required in the provision of this article and the author plus Future Accounting Group Pty Ltd is not acting in its capacity as an Australian Financial Services Licence holder
Liability limited by a scheme approved under professional standards legislation.