Protect Your Business
If you are a business owner or shareholder, your share of the company becomes part of your estate in the event of your death. As the business is likely to be one of, if not the most important and valuable asset in your estate, it’s important that you put plans in place to leave your share or company in good hands when you pass away.
Including plans for your business within your will allows you to ensure that it is taken over by a person or people chosen by you, rather than risking losing your share and possibly damaging the business itself.
By doing so, your business benefits your beneficiaries and the business itself, while preserving your hard work and legacy after you pass away.
There are several factors to consider when constructing this part of your will, and our team of experienced specialists are on hand to provide an excellent will-writing service that leaves no stone unturned.
Whether you own shares in a multi-million pound company or have built your own small family business from the beginning, you need to make sure that it is left to an adequate beneficiary in the event of your death.
What is business succession planning?
Business succession planning essentially refers to the logistical and financial decisions you must make regarding your business in the event of your death, retirement, an injury or illness.
The future of your business is highly insecure if you do not make plans for your death, and there are many questions to consider when deciding who it should be left to. For example:
- Who would be entitled to a share of your business?
- Could your business partners buy your share?
- Would your family members want the burden of owning a business?
- Would the business be in danger of declining without your management?
- Could your family members work with your current partners?
Family business succession planning is particularly important due to the disputes it could cause if you have not made clear who should take what percentage of your share within a will. Any business is likely to be of great financial value, but family businesses can also be worth a lot to your loved ones in terms of sentiment.
You must have a clear succession strategy and should ideally discuss it with your family and any existing partners while you are still alive, in order to prepare in the best way possible and ensure that your business continues to thrive when you’re no longer around.
There are a lot of responsibilities that come with owning a business, so be sure to provide the business successor with information on the following:
- Customer relations
- Export markets
- Access to critical passwords
- Control of bank accounts
You can give the successor(s) this information in a clearly written document inside the will, but you should also think about training a successor to be in a position to take over one day – if circumstances allow, of course. Life is unpredictable and death can strike at the moment you and your family least expect it, so having a will ready is recommended to cover all eventualities.
Letter of wishes in a will
Difficult decisions are made when choosing who should inherit your business, especially if the company is close to the family’s heart. In order to avoid family disputes following your death, our partner solicitors can help you write a letter of wishes.
A letter of wishes is a confidential and relatively informal document that is often written to accompany a will.
Unlike a will, a letter of wishes is not legally binding, but it is a useful way of explaining the nature of your choices to your loved ones left behind, as well as providing executors and trustees with guidance regarding your wishes following your death.
Inheritance tax and businesses
It’s important to plan for inheritance tax well before you pass away, especially as a business owner, as the tax bill can be such a considerable amount that the business is sometimes better off being sold due to it losing so much of its financial value.
The maximum estate threshold is currently set at £325,000, so you are required to pay 40% tax on anything above that amount. By using us at Quick Wills, you can put plans in place that help you avoid paying such a hefty bill, as there are legal ways of decreasing the inheritance tax on your estate.
However, if you find that your estate will be subject to significant inheritance tax, the executor or administrator of your estate could claim business relief. You are able to claim business relief on properties, unlisted shares and machinery.
For more information on inheritance tax and claiming business relief, get in touch with us today for a useful and informative consultation.
Will writing services in the UK
At Quick Wills, we work with our trusted partners to provide professional and tailored will writing services, including help with trusts. Our strong partnerships mean that we can provide you with a variety of services to cater to your needs, all at an affordable cost.
In order to receive your first consultation, get in touch today, obligation-free, by giving us a call or completing our short contact form and we will be in touch at a time that best suits you.Get in touch