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Overview:
Terms and Conditions: Legal Fee Policy Concessional Legal Fees
Additional Service Fees:
Initial Agreements:
Alternative Initial Agreements:
Proprietors Agreements:
Debt Reduction Agreements:
Other Services:
Cost Savings:
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Complete Succession Agreement(Multiple Policy Owners - Hybrid Business Insurance Trust Agreement)
Hybrid or Composite Agreement The body of the standard Complete Succession (or Business Insurance Trust) Agreement contains provisions that allow the ownership of the Buy/Sell Cover to be either:
This means that, simply by changing the wording of the Schedules to the Agreement to document the Client's arrangements, the Agreement can operate as either (or both):
As a result, the Agreement effectively forms a roof over any type of Policy Ownership selected by the Client and Adviser for the Buy/Sell Cover. The Agreement itself does not prescribe the method of Policy Ownership. Exclusive Buy/Sell Cover The Agreement allows the Clients to document Self-Ownership Buy/Sell arrangements, even if they do not require any Key Person or other Cover. Thus, an Adviser who prefers Self-Ownership of the Buy/Sell Cover can utilise either:
One Page, Two Policy Succession Plan In some cases, the Business might wish to obtain the benefit of a "One Page Succession Plan". However, it might not wish to use the One Policy Strategy. The usual motivation for not using a One Policy Strategy is the desire to hold some of the Cover in the name of a Superannuation Fund and/or the Life Insured. Super Fund Ownership of Buy/Sell and/or Personal CoverCover The Lives Insured might require some of the Buy/Sell or Personal Cover to be owned by a Public Offer Super Fund or Self-Managed Super Fund, where considered appropriate by the Adviser and Business. This practice is known as "Super Buy/Sell". The purpose of the Superannuation strategy would be to obtain a tax deduction with respect to some of the Premium. The Superannuation strategy is limited to the Buy/Sell and Personal Cover. It is not appropriate to hold Key Person or Debt Reduction Cover in the Superannuation environment, because it would breach the "sole purpose test". Click here to read more about Super Fund Ownership of Buy/Sell Cover. Self-Ownership of Buy/Sell and Personal Cover Alternatively, they might require:
One Page, Two Policy Succession Plan In these cases, the Hybrid Insurance Trust Agreement can be used to document a “One Page, Two Policy Succession Plan”.
Identity of Policy Owners and Trustee This Agreement enables the cover for each Life Insured to be split between two or more separate Policies owned by different parties:
Complete Succession Two or Three Policy Worksheet Click here to see a Risk Analysis Worksheet completed for a Complete Succession Plan held on Two or Three Policies pursuant to the terms of a Hybrid Business Insurance Trust Agreement.
Client Summary of Agreement Click here to see a brief Summary of the purpose and effect of the Agreement. Click here to read about your choice of Trustee.
Super Fund Ownership Click here for an overview with respect to Super Fund Ownership. Click here for an analysis of the tax and other disadvantages of Super Fund Ownership. Click here for a more specific discussion of the issues that affect Super Fund Ownership of Buy/Sell Cover .
Fixed Legal Fees The Fixed Fee charged by Clover Law depends on the choice of Agreement. Click here to see the current Fees for all Agreements and Services. These Fees apply subject to the Legal Fee Policy.
Standard Legal Fee Legal Fee (Up to Four Individuals) Standard Legal Fee: $4,400 NSW and Victorian Agreements In the case of NSW and Victorian Agreements, the Business might also have to pay Stamp Duty of up to $550 in addition to the Standard Legal Fee.
Legal Fee (More than Four Individuals) The above Fees apply for the first four individuals. There is an additional Fee of $330 per individual for each individual exceeding four individuals.
Additional Fact-Finding Fees It is not always possible to complete all of the details of the Business Structure and Liabilities of the Business in the Client Meeting or Teleconference. If the information is not supplied in the Questionnaire, there will be an additional Legal Fee of $440 to collect the information from the Business or its Advisers, review it and incorporate it into the Succession Plan and Documentation. Click here to read more about the Additional Fact-Finding Fees. Any Variation of Incomplete Draft AgreementThere will be an additional Fee for the finalisation of an incomplete draft Agreement not finalised within six months of the first draft:
Failure to finalise any Agreement promptly can have serious adverse commercial, legal and taxation implications for the Business and the other parties to the Agreement.
Original Beneficial Ownership of Policies The Policy Owner is intended to hold the Policy on behalf of the Beneficial Owner (usually the Life Insured) on the terms of a Trust Agreement. As a result , any delay in the instructions to prepare the Trust Agreement can result in Capital Gains Tax being paid on the Insurance Proceeds at the time of a subsequent claim. Click here to read about the importance of establishing the Original Beneficial Ownership of the Policies in accordance with the Clover Law Documentation Procedure.
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Adviser Tip The Hybrid Agreement is the appropriate engine for a One Page, Multiple Policy Strategy where the Business requires some of the Cover to be held in the Super environment. This might entitle the parties to tax deductions for some of the Premium, but might also expose the Insurance Proceeds to a tax liability in some cases.
Please contact us to arrange a meeting or teleconference. |
