Why is it important to consider your business as part of Estate planning?22/06/2021
If you are one of the 31% of UK adults who has made a will, you will understand the importance of documenting your wishes and intentions, regarding your personal assets, in the event of your death. This will help your family and loved ones at the difficult time. But what if you are also a business owner? In this case, a standard will may not be enough to safeguard the future of your business after your death.
By considering your business interests, when you make your will, you will be in a better position to guarantee that, on your death, the business, any shares, and assets will pass to the person or persons of your choice. If you fail to give consideration to these matters (in good time) your business interests or shares may pass to someone with no interest in the business, or with conflicting interests regarding the business’ direction.
Do any of your family members or loved ones rely on the business as a sole or majority income? If so, it is also important to consider what will happen to this income in the event of your death. Will it continue, will it cease, will it change?
When business succession planning, it is important to consider the effect on your personal estate (and assets), but also the following:
- Who will run the business, if it is to continue?
- Would you prefer for the business to be sold?
- How will your share of future profits be distributed e.g. to beneficiaries or back into the business?
- Are you permitted to pass your business interests to anyone you like or are your options limited by the company documentation?
Taking some time now to consider these points and documenting your wishes will make it easier for those that you leave behind. It could reduce ambiguity and the likelihood of costly disputes arising amongst business partners or family members relating to the business after your death.
Mincoffs Solicitors’ expert Wills, Probate and Trusts department, headed by partner Louise Miller, have worked with many business owners on their business succession plans to ensure that their loved ones, business partners and colleagues are safeguarded if the worst happens.
To speak to a member of our team about how they can ensure your interests are protected, call us on 0191 281 6151 or email Louise Miller at firstname.lastname@example.org. Alternatively, you can complete the enquiry form below.