Absolute have teamed up with Brighton’s oldest law firm QualitySolicitors Howlett Clarke to bring you a monthly insight into the latest legal issues, with top tips and advice.
Where there’s a Will, there’s a way.
The importance of having a valid will is often underestimated, particularly for those who own all or part of a business.
Many people are uncomfortable thinking about what will happen when they die; but in business having a will may be one of the most important decisions you make, for you and your employees.
If you are a sole trader, or are a partner in a business, the assets of your business or your share of assets owned by the partnership will form part of your estate when you die.
So, without a will, your shares could be sold, the business could be broken up or it could fall apart without the correct day-to-day running in place.
If you die without a will your property will be distributed under the laws of intestacy – and you will have no say as to where your assets end up. This may include business assets if you have not properly considered this aspect during your lifetime.
For those who do own part of a business you need to consider not only your family but also your business partners, co-directors or co-shareholders. If you own your business individually you will need to consider what will happen to that business, and your employees, upon your death.
If you are in a partnership you should consider at the outset what you intend to happen upon the death of any one of you; this should be included in the relevant written agreement made between you at that time. There may also be tax issues to consider, as well as the more practical issue of how your surviving partners would find the funds required to pay your share of the business out to your estate. You may need to take out a mutual life insurance policy for this purpose.
With business assets there are also inheritance tax issues to consider. Such assets may qualify for whole or partial inheritance tax relief and you will need to ensure that your will is drafted so as to make the most of those reliefs. Tax rules are complex and change frequently; precise wording can make a significant difference.
All too often people put off making a will, putting it to the bottom of the ‘to do’ list. For businesses, this can be catastrophic. My advice therefore is to seek legal assistance with creating a will that covers both personal and business issues and leave nothing to chance.
Solicitor, Wills and Probate
QS Howlett Clarke
8-9 Ship Street