Mark and Sarah had spent more than 30 years building their business. What started as a small operation run from a converted shed had grown into a successful company employing 25 staff. The business provided a comfortable lifestyle, owned valuable equipment, and generated profits that allowed them to invest in property and build up significant family wealth.

Mark and Sarah assumed they would eventually slow down, perhaps sell the business, and enjoy a well-earned retirement. Their two children, Emma and Josh, had occasionally worked in the business growing up, but neither had made any commitment to taking it over.
Whenever their accountant or lawyer raised the topic of succession planning, Mark would laugh and say, “We’re not retiring anytime soon”. There always seemed to be more urgent matters to deal with. Mark and Sarah were often at the lawyers for matters relating to the business, but seemed to never have time to look at their personal affairs.  
Then everything changed. At the age of 61, Mark suffered a serious stroke. Although he survived, he was unable to return to work for many months and it became increasingly clear that he would never be able to manage the business in the way he once had. The doctors said he had no capacity and asked if Sarah was his attorney. Powers of attorney had also been on the list of things to do “one day”. This meant Sarah had to make an application to the court, in order to be appointed as Mark’s property manager and welfare guardian, adding to her stress and the cost.  
At the same time, Sarah was trying to keep the business operating while also helping care for Mark. Staff were uncertain about who was making decisions. Suppliers wanted reassurance. Clients became nervous about the future. Emma and Josh wanted to help but had very different views about what should happen.  
Emma believed the business should be retained within the family and was willing to step into a management role. Josh had no interest in becoming involved and felt the business should simply be sold so that everyone could receive their share of the value. Sarah really did want to get out of the business so that she could care for Mark. She really thought it should be sold, but also wanted to help Emma if she wanted to be the one to carry on in the business. She was secretly amused by Josh’s comment that everyone should receive their share of the value! She had hoped that she and Mark had brought the children up to have no expectations, but maybe that wasn’t the case!
Sarah began to realise that the decision was about more than the future of the business. It was about how the wealth she and Mark had spent decades creating would eventually pass to the next generation, and how that could be done fairly when their children's goals were so different.
Sarah went to her lawyer to see what could be done. The lawyer suggested selling the business to Emma, but with a debt back so that the value of the business was captured at now, and that any increase in value that may happen over time would be to Emma’s benefit only. The debt could then either be repaid by Emma over time, or could be forgiven when Mark and Sarah died.  
This approach would allow Emma to take the business forward and benefit from any future growth, while recognising the value Mark and Sarah had already created. It would also give them a way to plan how that value could be shared across the family, rather than leaving those decisions until later.
Sarah wanted to make sure she was treating both children equally, so it was important that there would be an equal amount that would go to Josh. Mark and Sarah had been looking at downsizing their property, and Sarah thought once that sold she would lend Josh an equal amount for him to invest in an investment property. 

The lawyer also recommended putting in place new wills and powers of attorney, helping them create a clearer path for their family and their assets.
Thoughtful planning was no longer just about protecting the business. It was about ensuring the wealth Mark and Sarah had built over a lifetime could be passed on in a way that reflected their values, supported both children, and reduced the risk of future conflict.

Tammy McLeod, Managing Director, Davenports Law