Author Archives: David Hazlewood

Exit, Stage Right – Do you Need to Sell your Business to Retire?

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Many business owners who had been looking towards retirement placed these plans on hold as they focused on surviving the GFC. As business and the economy recovers, we spoke to Noel Johnson of Johnsons Corporate about how they are finding the market for the business sales.

The market for the sale of businesses stopped practically dead with the GFC according to Noel, essentially as though someone had turned off a light switch. Most buyers retreated to protect their existing assets, while those who remained in the market were looking to take advantage of distressed vendors and obtain a bargain. Most vendors throughout this period saw the GFC as being merely a blip, and so still placed a pre-crisis value on their business. The end result was that the gulf between buyers and sellers expectations was too large to bridge and no transactions occurred.

Both sides have now become more realistic. Vendors have realized that the GFC is not just a hiccough but a longer term issue, and that valuations have been and will continue to be impacted. Potential purchasers in most cases haven’t been able to get the bargains they thought they could, and so have realized they will need to pay up. As a result, more transactions are occurring.

The process is still a long one though. Noel’s firm deals with businesses valued at between $1 Million and $20 Million, and these are taking 4 to 12 months with an average time of 8 months from first discussion to settlement.

The profile of buyers has changed over the past 5 years. Prior to the GFC, 20% to 25% of businesses would sell to first time buyers including new entrants, private equity firms and businessmen looking at moving in a new direction. These buyers are no longer present, and sales are now solely to businesses in similar or associated industries. These buyers are looking for add on and synergistic purchases, where they have an opportunity for growth without excessive levels of risk. These buyers are able to obtain funding from their bank, whereas he is not seeing any bank support for new market entrants. Banks appear to be trying to look after their own clients, but they are being selective. Noel’s information is that it is difficult to obtain funding without a good relationship with your bank.

Most good businesses are much stronger financially than before the GFC. In a pattern we have seen replicated across the big end of town, businesses have paid down their debt and have adjusted their capital position. For those looking to grow by acquisition, this places them in an ideal position.

For businesses looking to grow, now might be an ideal time to expand. While the economy is improving, it is more likely that we will see gradual growth rather than a sudden acceleration over the next few years. In this in case, acquisitions might be one of the few ways to achieve significant growth. Worth considering is that it might be easier to put the right team together now as people’s expectations around earnings are much more realistic than a few years ago.

Many businesses have realized this, and as a result we are seeing greater levels of consolidation. One result of this is that the strong are getting stronger while the weak are declining, and competition is reducing as a result.

For business owners looking towards their retirement, Noel’s advice is to consider whether you have the energy and enthusiasm to grow the business over the next few years. The GFC has taken its toll on many people and if you don’t have the energy to grow the business, you may at best be marking time until you sell. In this instance, you might be better advised to sell and retire and move onto the next stage of your life.
Unfortunately most businesses aren’t geared for sale. If you are considering selling your business in the next few years, a valuable investment could be conducting a health check on it. The results should help you pinpoint the areas a potential buyer will view as a risk, and will allow you to take steps to mitigate these risks. This should help improve the saleability of your business, and hopefully also increase the value.

Want to know more?

For more information regarding our estates and succession planning services, including will preparation, powers of attorney, enduring guardianship, obtaining probate or letters of administration, and managing deceased estates, please use the quick enquiry form found on this page or call our office on 02 9687 8885. Our experienced estates lawyers look forward to assisting you with your estate and succession planning requirements.

This website is proudly supported by Phang Legal. This article was written by David Hazlewood and edited by Kenneth Ti, associate solicitor with Phang Legal.

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How can a Parent Care for their Disabled Child after their Death?

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If you are the parent of a child requiring ongoing care as a result of a disability, planning for their care in the event of your death is a major issue. One of the vehicles that can help manage their financial well being is a Special Disability Trust.This structure allows you to nominate a person (or more than one person) to act as trustee and manage the financial affairs of your child. The trust is allowed to invest the funds for the purpose of paying for the care and accommodation of the principal beneficiary – your child. This may include purchasing and owning a suitable property for them to live in.

There are significant Centrelink concessions available with these arrangements. Firstly, assets up to $563,250 (indexed each year) are exempt from the assets test, and if a property is owned by the trust and used as the beneficiaries home, this is also exempt. In addition to this, Centrelink does not assess any income or distributions from a Special Disability Trust. These concessions may not be not available to beneficiaries of a normal trust (family/discretionary trust, testamentary trust), and may mean you can leave significant levels of assets for the care of your child and they can still be entitled to government assistance.

For parents above Age Pension age, there is also the opportunity to gift funds to a Special Disability Trust. Ordinarily Centrelink would regard any gift above $10,000 in a financial year ($30,000 over a rolling five years) as an attempt to deprive yourself of assets to increase your pension entitlements, and accordingly they would continue to assess these gifts as your assets. In the case of gifts by eligible family members however, up to $500,000 (combined) can be gifted to a Special Disability Trust for the care of your child and Centrelink would no longer count this as your asset. This could potentially make you eligible for Centrelink Benefits, or increase your entitlement to them.

There are a number of conditions that must be met to receive these concessions, and this article just provides a broad overview.

Want to know more?

For more information regarding our estates and succession planning services, including will preparation, powers of attorney, enduring guardianship, obtaining probate or letters of administration, and managing deceased estates, please use the quick enquiry form found on this page or call our office on 02 9687 8885. Our experienced estates lawyers look forward to assisting you with your estate and succession planning requirements.

This website is proudly supported by Phang Legal. This article was written by David Hazlewood and edited by Kenneth Ti, associate solicitor with Phang Legal.

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How can a Parent Care for their Disabled Child after their Death?

Posted on by

If you are the parent of a child requiring ongoing care as a result of a disability, planning for their care in the event of your death is a major issue. One of the vehicles that can help manage their financial well being is a Special Disability Trust.This structure allows you to nominate a person (or more than one person) to act as trustee and manage the financial affairs of your child. The trust is allowed to invest the funds for the purpose of paying for the care and accommodation of the principal beneficiary – your child. This may include purchasing and owning a suitable property for them to live in.

There are significant Centrelink concessions available with these arrangements. Firstly, assets up to $563,250 (indexed each year) are exempt from the assets test, and if a property is owned by the trust and used as the beneficiaries home, this is also exempt. In addition to this, Centrelink does not assess any income or distributions from a Special Disability Trust. These concessions may not be not available to beneficiaries of a normal trust (family/discretionary trust, testamentary trust), and may mean you can leave significant levels of assets for the care of your child and they can still be entitled to government assistance.

For parents above Age Pension age, there is also the opportunity to gift funds to a Special Disability Trust. Ordinarily Centrelink would regard any gift above $10,000 in a financial year ($30,000 over a rolling five years) as an attempt to deprive yourself of assets to increase your pension entitlements, and accordingly they would continue to assess these gifts as your assets. In the case of gifts by eligible family members however, up to $500,000 (combined) can be gifted to a Special Disability Trust for the care of your child and Centrelink would no longer count this as your asset. This could potentially make you eligible for Centrelink Benefits, or increase your entitlement to them.

There are a number of conditions that must be met to receive these concessions, and this article just provides a broad overview.

Want to know more?

For more information regarding our estates and succession planning services, including will preparation, powers of attorney, enduring guardianship, obtaining probate or letters of administration, and managing deceased estates, please use the quick enquiry form found on this page or call our office on 02 9687 8885. Our experienced estates lawyers look forward to assisting you with your estate and succession planning requirements.

This website is proudly supported by Phang Legal. This article was written by David Hazlewood and edited by Kenneth Ti, associate solicitor with Phang Legal.

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Moving Into Aged Care – Further Considerations

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Moving a family member into Aged Care is usually a very difficult task. Often the need arises following an illness or injury, the result of which is that a loved one can no longer care for themselves in their own home. There is often little time available to research and make decisions (particularly if a hospital is involved), as the hospital faced tries to move them along to a facility which can provide a longer term solution.

For many people, moving a family member into an aged care facility will be their first contact with the aged care industry, and this can be quite daunting. The pressure of finding the right home and doing so quickly, combined with the concerns for the wellbeing of a parent make for a stressful combination.

We spoke to Janeene Lycett of Chesalon about the difficulties families face when choosing an Aged Care facility, and asked her how she would go about choosing a place for her parents.

What would you never accept from a facility?
You should never accept a bad attitude from the facility’s management and staff. If they have a bad attitude

towards you before your parent is admitted, how are they going to treat them and you, after they become a resident?

How can you make the process easier?
You can make the process easier by:

  • Being well informed – know what questions to ask when you are inspecting the facility and make sure they are answered.
  • Using the internet for research – this can significantly cut down on the time spent running around.

There are also placement agencies available who specialise in finding a facility to meet your specified needs. These organisations do charge for their services, however if you are time poor this may be an option.

Would you look for different things in a facility for your mum or your dad?
Aged care facilities have historically catered more for females than males because most residents were female. This is starting to change, and some places have developed specific recreation programs designed to appeal to men. These might include a Mens’ Shed, gardening programs or men only card games. Look for somewhere that does specifically cater for men.

Another issue relates to personal care and who provides this care, particularly as it relates to showering and toileting. It is important to find out how the facility will provide this care, and if they will accommodate your needs for staff of the same sex to provide this care. It might be quite stressful and confronting for an elderly lady to be showered by a male nurse (and vice versa), and if this is an issue you would want to obtain some assurances that this would only be done by someone of the same sex.

Want to know more?

For more information regarding our estates and succession planning services, including will preparation, powers of attorney, enduring guardianship, obtaining probate or letters of administration, and managing deceased estates, please use the quick enquiry form found on this page or call our office on 02 9687 8885. Our experienced estates lawyers look forward to assisting you with your estate and succession planning requirements.

This website is proudly supported by Phang Legal. This article was written by David Hazlewood and edited by Kenneth Ti, associate solicitor with Phang Legal.

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Moving Into Aged Care – Important Information

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Moving a family member into Aged Care is usually a very difficult task. Often the need arises following an illness or injury, the result of which is that a loved one can no longer care for themselves in their own home. There is often little time available to research and make decisions (particularly if a hospital is involved), as the hospital faced tries to move them along to a facility which can provide a longer term solution.

For many people, moving a family member into an aged care facility will be their first contact with the aged care industry, and this can be quite daunting. The pressure of finding the right home and doing so quickly, combined with the concerns for the wellbeing of a parent make for a stressful combination.

We spoke to Janeene Lycett of Chesalon about the difficulties families face when choosing an Aged Care facility, and asked her how she would go about choosing a place for her parents.

Who would you talk to at the facility to get comfortable with the how it is run?
The Facility Manager and the Care Manager are the most important people to get to know from this perspective. You need to feel that you can have open lines of communication with them to ensure your parents will be looked after, that any issues you raise will be dealt with, and that you will be notified if any issues arise. It is important that they are able to provide you with feedback on your parent and their care.

If you are not able to easily communicate with these people, there would be concerns regarding how effectively they are able to communicate with their staff and therefore how effectively the facility is managed.

Where would you look for independent information on a facility?

  • Their corporate website.
  • A Google search of the organisation – what are their values and are these consistent with the any independent reports or news items found on them?
  • The annual report on the organisation. This is important to check on the financial health and well being of the organisation, because having gone through the process of finding a suitable facility you do not want to have to repeat the exercise because the facility closes due to financial difficulties.
  • Social workers at the hospital – they will have a good feel for local facilities, so be sure to ask their opinion
  • The Aged Care Standards and Accreditation Agency. This is the federal organisation charged with accrediting and auditing aged care facilities. You can read about the latest inspections and accreditation audits conducted on any facility.
  • Department of Health and Ageing. Look for any Sanctions or Notices of Non-Compliance imposed on a facility. These include historical notices so you can see if facility has a history of not meeting appropriate standards.

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Moving Into Aged Care – Important Considerations

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Moving a family member into Aged Care is usually a very difficult task. Often the need arises following an illness or injury, the result of which is that a loved one can no longer care for themselves in their own home. There is often little time available to research and make decisions (particularly if a hospital is involved), as the hospital faced tries to move them along to a facility which can provide a longer term solution.

For many people, moving a family member into an aged care facility will be their first contact with the aged care industry, and this can be quite daunting. The pressure of finding the right home and doing so quickly, combined with the concerns for the wellbeing of a parent make for a stressful combination.

We spoke to Janeene Lycett of Chesalon about the difficulties families face when choosing an Aged Care facility, and asked her how she would go about choosing a place for her parents.

What would you look for in a facility?
There are a number of questions to ask and consider, such as:

  • What is the level of service offered by a facility?
  • Is it a standard facility or does it offer extra services?
  • If so, are they appropriate for both you and your family member’s needs?
  • Is it affordable?
  • Who owns and runs the facility?
  • Are they well known, and do they have a good reputation?

Extra services can include more modern facilities, a choice of food and in some cases, alcohol at meal times, internet access and individual air-conditioning controls, among other things. Extra services does not mean extra care as the level of care is legislated. It is important to recognize that extra services do come at a cost, and this must be factored into your calculations to ensure your care is affordable now and in the longer term.

There are a number of large operators of aged care facilities. Some of these are religious organisations or other not for profit groups. There are also some large companies (for profit) organisations. You should be comfortable with the organization standing behind the facility.

Most important though, is your gut feel. What is your first impression when you walk into the facility? Does it look well maintained and clean? Do the residents look happy and well cared for? There is a lot to be said for first impressions, and if your initial impressions aren’t favourable then you are probably better off looking at the next place on your list.

What issues are important in the selection process?
The location and proximity of the aged care facility to family is very important. Families are now often spread over wide areas which can make it difficult for some to be involved in the ongoing care process. It is very important to select a facility that is located close to one family member who is both willing and able to visit and to be involved in their care.

If at all possible the facility should be located close to friends, but unfortunately this is not always possible.

The age of the facility is one of the

least important factors, provided it is well maintained. You should not automatically exclude a facility just because it is located in an older building.

Want to know more?

For more information regarding our estates and succession planning services, including will preparation, powers of attorney, enduring guardianship, obtaining probate or letters of administration, and managing deceased estates, please use the quick enquiry form found on this page or call our office on 02 9687 8885. Our experienced estates lawyers look forward to assisting you with your estate and succession planning requirements.

This website is proudly supported by Phang Legal. This article was written by David Hazlewood and edited by Kenneth Ti, associate solicitor with Phang Legal.

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