Home

 

Overview:

Fixed Legal Fees

 

Terms and Conditions:

Legal Fee Policy Concessional Legal Fees

Concessional Legal Fees

Reduced Legal Fees

Original Beneficial Ownership

 

Additional Service Fees:

Additional Fact-Finding Fees

Variations of Draft Agreement

 

Initial Agreements:

Initial Agreements

Content of all Agreements

Current Legal Fees

Inadequate Insurance Proceeds

Trauma Buy/Sell Strategy

 

Alternative Initial Agreements:

Complete (BITA)

Complete (Hybrid BITA)

Simple (Self-Owned BSA)

 

Proprietors Agreements:

Proprietors Agreement

 

Debt Reduction Agreements:

Debt Reduction Agreement

 

Other Services:

Variation Agreements

Meetings and Advice

 

Cost Savings:

Cost Savings

 

 

 

Standard Content of All IGS Business Succession Agreements

 

A Complete Succession Agreement does not deal only with Insured Events.

It can also deal with other events (such as Retirement).

As a result, it is the legal engine for a Complete Succession Plan, not just an Insurance Strategy.

It is also a legal framework for changes that are likely to happen over the duration of the Business.

This includes increases (or decreases) in value, which might need to be funded by Insurance Cover or other means.

 

Alternative Business Succession Agreements

IGS offers a number of alternative Business Succession Agreements on a Fixed Fee basis:

IGS can use any one of the Agreements to document a Simple Succession Plan.

However, it uses either a Business Insurance Trust Agreement or a Hybrid Business Insurance Trust Agreement to document a Complete Succession Plan.

 

Identity of Trustee

The Trustee is usually the Clients' Business itself or one of the entities within the Business Structure (preferably a Company).

IGS does not use an Institutional Trustee Company.

Click here to read about your choice of Trustee.

A Trustee is not required for the Simple Succession (or Self-Ownership Business Succession) Agreement.

 

Comparing Business Succession Agreements

All standard IGS Agreements are intended to give a Business greater functionality, security, tax-effectiveness and cost-effectiveness than a Buy/Sell or Business Succession Agreement prepared by other Lawyers.

Click here to see a guide that will help you compare the benefits of Business Succession Agreements prepared by different Lawyers.

 

What the Legal Fee Entitles You To

In the case of each IGS Agreement, the Fixed Legal Fee entitles the Business to the cost of drafting:

The role of the Agreement is to document a Succession Plan for each Proprietor, regardless of whether they can obtain any or adequate Insurance Cover.

 

Meetings and Advice

The standard Fee allows for up to two (2) hours’ consultation with the Adviser or Client with respect to the Client’s Insurance Needs.

This is sufficient to deal with the requirements of most Businesses.

If additional Meetings or Advice are required to formulate the terms of a Vendor Finance or Retirement Strategy, IGS will quote an alternative Fixed Fee.

 

Insertion of Vendor Finance Provisions in Subsequent Variation Agreement

Sometimes, the parties might be able to obtain adequate Buy/Sell Cover when they sign their Initial Agreement, but are unable to obtain additional Cover, when they review the value of their Business in the future.

This makes it necessary for the Variation Agreement to address the terms of payment of the shortfall.

In particular, the shortfall might be addressed by Instalments or Vendor Finance Provisions.

Inadequate Insurance Proceeds

Please click here to read about options to deal with Inadequate Insurance Proceeds and Purchase Price Shortfalls.

Insertion of Provisions in Post-2005 Agreements

The standard Fixed Fee for an Initial Agreement paid for after 1 January, 2005 makes allowance for the drafting of Vendor Finance Provisions in a subsequent Variation Agreement for the standard Variation Fee at the time.

As a result, the insertion of these Provisions will not increase the standard Variation Fee at the time.

There may still be a Fee for any Meetings or Advice required to formulate the terms of a Vendor Finance or Retirement Strategy.

Insertion of Provisions in Pre-2005 Agreements

If the Initial Agreement was paid for before 1 January, 2005, there is a Fee of $550 for the insertion of these Provisions in a subsequent Variation Agreement.

This Fee is additional to the standard Variation Fee and any Meeting and Advice Fee.

 

All Insured Events

Many Lawyers charge one Fee for a Business Succession Agreement that deals with Death Only or Death and TPD.

However, this Fee does not include provision for the cost of drafting a Trauma strategy, which would involve in an additional Fee.

The standard Fixed Fee for all IGS Agreements entitles the Business to the drafting of a strategy that deals with all three Insured Events (i.e., Death, TPD and Trauma).

 

Trauma Buy/Sell Strategy

See here with respect to the Trauma Buy/Sell Strategy contained in all standard IGS Business Succession Agreements.

 

Inadequate Insurance Proceeds

Sometimes, it isn't possible for all of the Proprietors of a Business to obtain the amount of Buy/Sell Insurance they require.

This could happen because of health or premium cost.

In these cases, the available Insurance Proceeds might fund only part of the Pre-Agreed Purchase Price.

No Additional Drafting Fee

The standard Fixed Fee for all IGS Agreements entitles the Business to the drafting of Vendor Finance or other Provisions that deal with the payment of any shortfall in the Sum Insured.

This means that if a Proprietor is unable to obtain the required amount of Buy/Sell Cover for the Purchase Price of their Equity, they will still have a pre-agreed Succession Plan.

As a result, the Proprietors are not prejudiced by the payment of the Legal Fee before the Policies have been underwritten.

Additional Meeting and Advice Fee

If additional Meetings or Advice are required to formulate the terms of a Vendor Finance or Retirement Strategy, IGS will quote an alternative Fixed Fee.

Example

For example, if the Pre-agreed Sale Price was $400,000 and the only Cover available was for $200,000, the Vendor Finance Provisions could provide that the shortfall of $200,000 would be paid in four annual instalments of $50,000 per annum (plus interest).

Changes Because of Underwriting Decisions

Sometimes the Life Insured will not know whether they can obtain adequate Insurance Cover until the Underwriter assesses their application.

If a Proprietor is unable to obtain the required amount of Buy/Sell Cover for the Purchase Price of their Equity, the standard Legal Fee incorporates the cost of drafting Vendor Finance Provisions.

As a result, they will still have a pre-agreed Succession Plan.

Thus, any adverse decisions made in the insurance underwriting process will not necessarily frustrate the formulation of a Complete Succession Plan for all Proprietors.

The role of the Agreement is to document a Succession Plan for each Proprietor, regardless of whether they can obtain any or adequate Insurance Cover.

 

Retirement

The standard Fixed Fee for all IGS Agreements entitles the Business to the drafting of Vendor Finance or other Provisions that deal with the payment of the Purchase Price by way of Instalments or Vendor Finance.

 

Copyright: Ian Gray Solicitor

 

 

Adviser Tip

All standard IGS Agreements are intended to give a Business greater functionality, security, tax-effectiveness and cost-effectiveness than a Business Succession Agreement prepared by other Lawyers.

See more Adviser Tips

 

 

 

 

Current Marketing Schedule

Current Marketing Schedule

Ian Gray travels to most capital cities regularly throughout the year and is available for Meetings.

Please click here to see his availability in Brisbane, Sydney, Melbourne, Adelaide and Perth.

Please contact us to arrange an appointment or teleconference.