The Importance of Business Wills -Without One You Risk Chaos
Up to 70% of people are without the protection of a valid or up-to-date will. Many of those will be business owners or directors. Failing to make a will can create a serious risk to family and business partners.
Our experienced wills team strongly recommend that all business owners and company directors ensure not only that they have a valid will but that it is updated at least once every five years to take account of changing personal, tax and business circumstances.
If you’re not sure of whether or not you need to update your will, then take advantage of Bonallack & Bishop’s FREE will review offer. Just call us today.
The very real risks to your business if you have no Will
In particular, working with the firm’s business team, our wills solicitors can make sure amongst other things that:
- Your business continues to run after you die
- That your business interests are properly inherited – within or without the family, as you would wish. In particular, your will and any partnership, shareholders agreement or company documentation should adequately provide that your intended beneficiaries correctly inherit whatever company shares or part of your business you wish to leave them – this is particularly important as business documentation such as a partnership agreement can take precedence over your will in case of conflict between the two.
- The will maximises tax savings – including inheritance tax and various forms of business tax relief. And with the £325,000 inheritance tax nil rate tax band due to remain at that level until at least 2028, tax and estate planning is not just for the rich these days.
Click here to read more about how our inheritance tax planning solicitors can help you reduce your tax burden
- A properly drafted will prevent potentially highly divisive and expensive inheritance claims on your estate – claims even against your share of the business.
- There is adequate succession planning for directors.
A properly drafted will need not be expensive. Our basic wills start from just £225 (+ VAT ) – and even the most complex will is nowhere near as expensive as the cost of court proceedings to decide how to divide an estate following a challenge to the will or an invalid will.
Click here to read more about making your will
Why business owners also need a Lasting Power of Attorney
If you own a thriving business you may feel that your company’s financial future is secure. However, should you become incapacitated and you have made plans for someone to run the business in your absence, your business will be at serious risk.
It is crucial that a trustworthy person is transferred the legal authority to authorise payments and make strategic decisions for the business when you are either mentally or physically unable to do so. The Court of Protection will eventually choose someone but this could take months, by which point your business could already have been dragged under.
In order to give someone the legal right to make such decisions in your absence a legally binding document known as Lasting Power of Attorney (LPA) must be signed.
Business owners – is a will enough?
Many business owners assume that because they have written a will they are protected should they find themselves unable to run their business. However, what they are forgetting is that whilst writing a will would ensure a successor to their business following the death, it provides no protection while they are still alive. It is therefore of paramount importance that businesses protect themselves in the event that they can no longer look after the business themselves. And the solution is simple and relatively inexpensive.
We are never far aware from a life changing accident or health problem, whether it be a road traffic accident or a stroke. Therefore, the uncomfortable truth is that we are not immune to these troubles and need not hit old age before they become a problem and place our businesses at risk.
Allowing your business to fail because you did not take the necessary steps to protect it will not only affect you, but your family and any other dependents as well. As a result, it is important that you contact a solicitor about a Lasting Power of Attorney before it’s too late.
Click here to read more about making a Lasting Power of Attorney
What is a General Power of Attorney?
The General or Ordinary Power of Attorney (GPA) serves a completely different purpose from the LPA. Whereas the LPA takes effect when you lose mental capacity, GPA is only able to function whilst you have capacity. It is often used for a short-term purpose – perhaps if the business owner partner or director is temporarily unavailable for some reason.
It is a simple but very useful document and surprisingly few businesses are aware of it.
Click here to read more about the General Power of Attorney