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Business owners and Wills

7 December 2021

Good business owners understand the need for good forward planning. Whether that is making sure that things are in place to allow for the unexpected bill coming in, being ready to accommodate a particularly demanding client’s needs, or the bigger picture plans relating to the growth and future of the business. Part of this forward planning should also include considerations surrounding your personal legal circumstances – in particular, making a Will.

Why should I make a Will?

Firstly, there are loads of reasons why anyone should make a Will.

  1. Control – having a Will is genuinely the only way to make sure that what you want to happen with your assets after you die, actually happens. Without a Will, the intestacy rules will dictate who inherits your estate – and it’s not always straight forward.
  2. Peace of mind – the knowledge that your loved ones will be looked after when you’re gone, is very valuable. As is making sure that those family members who you DON’T want to inherit are properly excluded.
  3. Security – there are mechanisms that can be included within your Will to help protect assets – for instance against the payment of care fees, or if a vulnerable beneficiary would struggle to look after the funds themselves. Wills can be very flexible, and can adapt to your family’s unique needs.

Business owners, in particular should think about making Wills. There are certain inheritance tax allowances and reliefs that apply to many (but not all) business owners – taking this into account when making your Will can make a big difference to how much tax your family may need to pay on your death. This applies whether you are just starting up your business, have been going for some time, or are ready to wind down.

When setting up or reviewing their Will, a shrewd business owner should be considering the following with their business specifically in mind:

  1. Succession planning – do you want a family member to continue running the business when you are gone? This doesn’t automatically happen when you go, and provision in a Will makes your intentions clear, and can help smooth over the transition from one owner to the other.
  2. Continuity – when a business has multiple owners (such as shareholders in a limited company, or partners in a partnership), the people involved would be sensible to look into what happens when a key party to the business passes away – where do the decision making powers lie? Who can make ongoing decisions? It is also possible to obtain insurance products that may pay out when a particular person passes away – making it easier for the business to continue. We work closely with third party advisers who can assist you with this sort of planning, as well as with our colleagues in the Commercial department who can ensure that your existing business structures are suitable.
  3. Retirement planning – if you are looking to wind down your business in the near future, it is particularly important to make sure you have specialist advice about the consequences of this on your Will and your tax position – as the inheritance tax reliefs may no longer be available to you. We will work closely with your tax adviser and pension planner to ensure that you can obtain the best outcome for you, and that your loved ones aren’t hit with an avoidable tax bill.

What do I do now?

To book an appointment with one of Poole Alcock’s specialist solicitors – contact us now on:   0800 470 0339. Or fill in our online contact form.

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