Business Succession Agreements


Types of Agreement:

Types of Agreement

Cross Ownership:

Cross Ownership

Self Ownership:

Self Ownership

Related Party Vendors

Deemed Dividends

Risks If No Agreement

Trust Ownership:

Trust Ownership

Tax Implications

"Business Family Will"

Changing Needs


Choice of Trustee

Super Buy/Sell


Drafting Issues:

Put Options

Call Options

Put and Call Options

Conditions Precedent

Put and Call Options vs. Conditions Precedent


Other Issues:

Pre-Agreed Purchase Price

Inadequate Insurance Proceeds

Trauma Buy/Sell Strategy

Simultaneous Deaths


Debt Reduction Agreement:

Debt Reduction Agreement







Benefits of a Business Insurance Trust Agreement


The Clover Law Business Insurance Trust Agreement is a unique Agreement that:


  • is the legal and tax foundation of a One-Page Succession Plan;

  • helps business people to see the Big Picture on one worksheet;

  • allows all Business and Personal Insurance Cover to be included on One Policy held by just One Owner for each Life Insured (rather than Multiple Policies owned by Multiple Owners);


  • enables a Business to combine Asset (Purchase Price), Liability (Key Person) and Personal Needs/Cover on one Policy for each Life Insured;

  • allows Personal and Self-Managed Superannuation Fund-owned Cover to be held on one Policy;

  • allows the legal strategy to become secondary to the commercial and insurance strategy of the Succession Plan;


  • can place a “Roof” over one new Policy or a number of existing Policies;

  • creates an “Insurance Facility” within which Cover can be re-allocated within the Policy as individual needs change;

  • allows future increases in the Purchase Price to be funded by Insurance Cover that was previously allocated to other needs that might have reduced (such as Debt Reduction or Personal Cover);

  • maximises Future Insurability of the Purchase Price;


  • is a “Legal Engine” that securely drives all components of the Policy to the appropriate Recipient;

  • places a “Roof of Security” over the Insurance Cover that minimises the risk of default;


  • has obtained a positive opinion from the CGT Cell of the ATO;

  • solves all relevant insurance ownership and tax issues;

  • addresses tax issues with respect to the payment of the insurance proceeds by the Insurance Company to the Policy Owner or Beneficial Owner of the Policy;

  • addresses tax issues with respect to payments to the appropriate Recipients;


  • reduces Policy Fees;

  • maximises Volume Discounts with respect to the Premiums;

  • provides greater protection for a comparable legal fee.


Copyright: Clover Law Pty Ltd



Adviser Tip

Trust Ownership can do everything that Self-Ownership can do, but Self-Ownership can't do everything that Trust Ownership can do.


See more Adviser Tips




Please contact us to arrange a meeting or teleconference.