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When you own a business, you need to think about what may happen to it in the future. If you don’t have a solid plan in place, there is a risk you could lose everything you’ve worked for, and those who care about your work could be unable to do anything.
Why Business Owners Need a Will?
Writing your Will, and having a plan in place, can help you feel reassured that your assets will be looked after the way you want them to be. If you don’t have a Will that covers your business stakes, your shareholdings could pass on to someone who does not have the skills or experience to run a business successfully. There is also a possibility that it could cause conflict regarding how the business should be run.
If you don’t have a Will in place, your business could lose its value or be sold. As a business owner, you probably have some strong feelings about what you want to happen with your business in the future. Having a Will, detailing what your wishes are, can help you decide on what you want to happen to your business interests.
Below are some things you need to know and consider when writing a Will for your business.
What you need to consider when writing your Will?
Similarly to a standard Will, where you state your wishes for inheritance, assets and estate, a business Will should contain information about your wishes for your business interests. If a business owner dies without a Will in place, it can make things difficult for others involved to sort out in the aftermath.
For some businesses, trading will automatically cease if the owner passes away, which can have a negative effect on the business value for the beneficiaries. Having a Will for your business should prevent this.
You should also consider if you want a different executor for the business side, versus your personal effects.
1. Estate Planning
There are various advantages to placing your business into a trust in your Will, including asset protection, inheritance tax advantages and simplifying your estate administration.
2. Set business goals
In your Will, you can provide your suggested long term plan for your business. You can give any instructions on how you would like the business to be looked after when you pass away. This could include company values and traditions you want to be continued in your absence. Neglecting these aspects could hurt the business in the future.
3. Lasting Power of Attorney
On top of writing your Will, there are other things you should consider putting in place to keep your future business interests safe, one of which is organising a Lasting Power of Attorney (LPA). This document is separate from a Will, but can be done at the same time.
An LPA is a document that allows a chosen individual (Attorney) to act on your behalf in the event of incapacitation. There are two different types of LPAs: Health and Care, and Property and Financial Affairs, but for your business needs, it’s the Property and Financial Affairs LPA that will be required. This LPA allows the assigned attorney to make decisions regarding your finances, from money, tax, bills, property and investments.
It’s important to have an LPA as well as a Will, as both of these documents simplify the process if any issues arise when you are unable to make decisions for yourself. Working with a specialist Lasting Power of Attorney solicitors firm, such as Black Norman Solicitors, can help you navigate the process and ensure everything is more streamlined.
Overall, it’s important to have your business protected, so having a Will and LPA set up is your best way to do so. That way, your wishes are clearly stated and can be executed if you are incapacitated or have passed.