Ensuring your business’ affairs are in order: Is this something you’ve overlooked?
Have you thought about what would happen if you passed away? Have you thought about how that would impact your business?
As a business owner, you will no doubt have given a lot of thought to how to run your business in a consumer friendly, cost-sensitive and tax-efficient way. You will have planned for how to grow your company sustainably to best take advantage of opportunities that may arise. You will have your business’ affairs in order: you will have implemented a Shareholders Agreement to make sure all of the owners are on the same page, you will have completed Articles of Association to ensure the smooth day-to-day running of your business. You may even have planned for a few contingencies, such as, alternative premises you could run your business from if your current premises were, for whatever reason, no longer useable.
You probably haven’t thought about your Will, at least not in the context of your business.
You will have put in all your hard work, not only to provide an income for you whilst you are alive, but also with the hope that you will be able to pass on the fruits of your endeavours to your family and/or friends, when the time comes.
If you are without a Will, or it is not well considered, it could undo all your hard work. Your estate might pay far more Inheritance Tax than it should if it does not make best use of Business Property Relief. This is a relief which could potentially provide 100% relief from Inheritance Tax, effectively meaning total exemption and therefore too valuable to waste. Your Executors will hold your shares whilst the Estate is being administered but they may feel ill-equipped and/or lack the time to understand the running of the business. Co-owners of the business might be unable to take key decisions or be frustrated by Executors or beneficiaries and of course if it applies to them, it will also apply to you!
Do you have a Shareholders or Options Agreement or Key Man insurance in place? The surviving co-owners may struggle to afford to buy the shares from your estate and may not wish to be in business with your beneficiaries. You might feel the same if was your co-owner who died. In turn, this will likely reduce the amount available to your chosen beneficiaries, the very people who you most wanted to benefit from your endeavours.
Therefore, to truly have all of your business’ affairs in order, this does, by necessity, also require you to have your personal affairs in order.
For information on making a Will in terms of being a business owner or shareholder or to find out more about Business Property Relief contact our Wills team on 01908 660966 or 01604 828282 or email firstname.lastname@example.org.