Estate Planning
Estate Planning document

Family Constitution

Use Cleardocs to start the process of creating your family Constitution. On purchasing, you only need to provide the Family Name to get started. Later you can return to complete new versions as you progress in discussions with the family. Version control allows you to add/change information and create new versions.

  • Cleardocs fee incl GST $429.00
Product Benefits
  • Assists current and future generations to deal with the benefits and complexities of being a family in business
  • Easy-to-use question interface that can be updated up to 150 times. That means you can build the document progressively and download each version as you complete/change the sections.
  • Records the family thoughts that guide your unique succession. This then may inform family member estate planning.
  • Comprises part of the succession or estate plan of stakeholders
  • Extensive online help and local phone support
Product Information

What documents are included in the Cleardocs package?

You will receive:

  • your tailored Family Constitution; and
  • an Establishment Kit explaining what to do next.

What information do you need to order your Family Constitution through Cleardocs?

Our checklist outlines all the information required.

What is a family constitution?

A family constitution is generally a record of policies developed by the family in conjunction with their independent adviser. These policies are consistent with the family's values and beliefs and, as a result, establish the parameters for the family's interaction with the family business(es) and other family capital.

The Cleardocs Family Constitution is not legally binding. One of the benefits of the Cleardocs Family Constitution is that it avoids any policies, or the document itself, inadvertently causing legally binding obligations.

The Cleardocs Family Constitution provides a robust framework for families to commence their communication and education around succession. It provides flexibility to choose policies currently relevant to the family while leaving others until later. Families may also personalise the details of the policies for the family's particular circumstances.

Who should consider a family constitution?

A family constitution should be considered when families in business intend to transition the stewardship and ownership of family wealth, including business interests, to the next generation. It assists in the process of succession rather than merely managing the event of succession itself.

Who is family?

"Family" may seem obvious but this question relates to who should be part of the communication process when dealing with wealth, business and succession. For example, are spouses included, and at what age should children be involved? The Cleardocs Family Constitution allows you to tailor the definition of "family" to suit your family's circumstances.

Industry experience indicates that the wider the family net is cast, the more sustainable the outcomes will be. As part of the process of creating a family constitution, each family needs to consider their own unique circumstances and ensure that they and their independent adviser consider this question early.

Who should be involved in the development of a family constitution?

There is no one-size-fits-all when it comes to creating a family constitution. The Cleardocs Family Constitution is a way for trusted family advisers to start a process with the family as the family discusses, develops and decides on policies relevant to them.

How does the decision-making process actually work in creating a family constitution?

All decision-making regarding a family constitution needs to be both collaborative and well informed. Ensuring that all stakeholders support the process is essential. It is common for one or more people from different family branches to be responsible for driving the process with the family's trusted independent adviser.

What topics does the Cleardocs Family Constitution cover?

Having a Cleardocs Family Constitution in place allows the family to record, among other things:

  • the family's values and principles;
  • family aspirations for their business interests;
  • establishment of a family governance structure;
  • decision-making and conflict resolution;
  • policies for important matters such as the employment of family members in the family business and education and development of family as current and future stewards;
  • overarching investment strategy;
  • communication within the family and the business; and
  • liquidity and the entry into and exit from the family business.

When should we adopt the Family Constitution?

Starting a family constitution and adopting a family constitution are two different stages. The Cleardocs Family Constitution can be produced after some initial consultation with the family representatives and their adviser. The conversation, facilitated by the adviser, will then move to the family group for discussion, education, development and ultimately agreement.

The Family Constitution is adopted when the family members have reached agreement on its policies and all of the family members sign the document. New family members entering the family group may later sign a separate adoption statement.

How do we create a new version of the Cleardocs Family Constitution when new policies are developed or the family changes?

Over time, new policies and approaches may make sense for your Family Constitution. The Cleardocs Family Constitution has been designed to allow for changes through a unique version control feature. Return to the document to complete as many versions as you need up to 150.

How will we deal with the ordinary emotion within family relationships when trying to develop our constitution?

It is important to acknowledge that there will be emotion in the course of discussing the elements of your family constitution. However, the process will also improve family bonds, communication skills and problem-solving, and provide a shared plan for the future. A trusted independent adviser can help facilitate the process by dealing with the ordinary emotion expected in family communication.

The Cleardocs Family Constitution is non-binding

The Family Constitution is not legally binding on or legally enforceable against family members or future generations of the family. It is a statement of intentions or wishes that aims to facilitate harmonious relationships during the running of the family business. It is intended as a road map of values and guidelines.

The parties' intentions as set out in the Family Constitution may be subject to binding legal obligations under:

  • laws;
  • business governance documents, including any company Constitution, trust deed or rules; or
  • other binding agreements.

The Family Constitution is not a substitute for those legal obligations.

Through Cleardocs, you tailor the document to the family's particular circumstances. The Cleardocs document provides that the specific intentions and wishes be determined by a collaborative process within the family group — this will ensure the commitment of family members to the terms of the Family Constitution.

What takes priority: the company Constitution or Family Constitution?

The Family Constitution is not legally binding on or legally enforceable against family members or future generations of the family. It is a statement of intentions or wishes that aims to facilitate the sustainability of harmonious relationships and family business interests. It is intended as a road map of values and guidelines.

Therefore, the Cleardocs Family Constitution is to be read subject to the provisions of any (binding) business governance documents, such as a company Constitution, a trust deed or other specific governing rules.

If there is an inconsistency between the Family Constitution and a legal document, the relevant provision of the legal document will apply.

Can the Family Constitution be used outside Australia?

The Family Constitution does not specifically refer to the laws of any particular country. Therefore, it can potentially be used in any country. However, if you intend to use it outside Australia, you should seek your own independent legal advice.

What happens if I need external assistance?

The Cleardocs Family Constitution has been developed in partnership with world-leading family business experts. If you need assistance, contact the Cleardocs helpline on 1300 307 343 and we can arrange for you to speak to FINH.

Seek legal advice

The Family Constitution information here should be considered general in nature, and in no way interpreted as legal advice. You must always seek your own independent legal, accounting and financial advice in the country in which your business or businesses operate about your particular situation. The summary on this page is for information purposes only.

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