NEW ZEALAND Law and Practice Contributed by: Greg Ambler and Elizabeth Heaney, Tompkins Wake
video storage, and other personal data stored on computers or mobile devices. Will makers need to consider custodial methods of these various assets, appropriate methods to hold authority to enter and use these assets, and take specialist advice to make provision for these assets in testamentary documents. It is not uncommon for New Zealand will makers to make provision in their wills for digital assets.
succession of the business. These structures provide accountability, continuity and strategic oversight, and they support long-term sustainability during genera- tional transition. Family businesses also employ appropriate insurance (for example, key person insurance, in the event a key family leader dies, or life insurance, to make provision for inheritances for non-business owning descendants). It is becoming common for families to develop and adopt “family constitutions” or written succession plans, which can cover family history and principles, business exit policies, dividend expectations, invest- ment policy and mechanisms for the resolution of disputes. These structures are usually supported by bespoke asset planning documents to provide for decision makers to be appointed in the event of incapacity of a key person, the eventual transfer of wealth through a will, and guidance to the trustees of a trust. 8.2 Legal and Tax Considerations New Zealand business structures (primarily compa- nies, limited partnerships and trust-owned operat- ing companies) are governed by the Companies Act 1993 and the Limited Partnerships Act 2008. These provide a predictable, low-complexity legal environ- ment, allowing families to use corporate restructures, share transfers, buy-sell agreements and shareholder arrangements to manage succession. The Companies Act framework also supports: • staged ownership transfers (eg, share buy backs, issuing new shares to successors); and • governance continuity, including advisory boards or formal boards, which are increasingly common in New Zealand family enterprises. This makes corporate structuring a central tool in long-term succession planning. Succession strategies for family businesses in New Zealand are otherwise shaped by a favourable legal and tax environment, particularly the absence of gift duty, inheritance tax and general capital gains tax,
8. Family Business Succession Planning 8.1 Succession Strategies
Family business succession in New Zealand common- ly involves a mix of ownership planning, governance structuring and financial/estate planning mechanisms. New Zealand advisers place importance on the iden- tification of successors early and the provision of time for them to build capability, leadership skills and com- mercial experience. This includes formal mentoring, education and trial leadership roles. Families often obtain an independent business valua- tion to ensure transparency, manage expectations and guide ownership transfers (whether by sale, gifting, inheritance or a combination of these). Valuation data helps reduce conflict and supports equitable treat- ment of children not entering the business. Discretionary trusts are commonly used in New Zea- land family business succession planning. They allow families to: • use a flexible and ring-fenced entity to hold the business assets; • stage asset transfers across generations; • protect assets from relationship property and credi- tor claims; and • avoid disruption on the death of a founder or busi- ness owner. Many successful New Zealand family businesses implement advisory boards, and multi-generational governance bodies to oversee the operation and
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