If you own a business or have shares in a family company then you should consider making a Will. The following are some of the reasons why making a Will for business owners is so important.
1. The first reason is the fact you can select appropriate executors and
trustees, who will be responsible for ensuring the running of the
business after your death. Unlike funds in the bank, where management
can be fairly minimal, your executors will almost certainly need to
ensure the business is kept running in the short term until more long
decisions can be taken.
For even the smallest business, your executor's job is to ensure that
your financial obligations are met, this can include dealing with tax
issues, employees and your business accounts. Failing to do so could
have a detrimental effect on the value of the business and therefore
mean your family lose out financially. So while your may ultimately want
your spouse or children to inherit, if they are not going to be the
appropriate executors then you can appoint executors who have the
business skills to carry out the executor's duties effectively.
2. The second reason is that by drafting your Will, you can take
advantage of the tax breaks offered for business property. There are
ways in which the Will can be prepared to ensure that not only do you
pass your business to the people you want to inherit, but you do so in a
way that limits your total inheritance tax bill as well.
3. The third reason is for making a Will is so that you define exactly
how your executors can act. By making a Will, you are able to ensure
that your executors have all the necessary powers and authorities they
will need to carry on your business and run it correctly. Without a
Will, your estate may end up in a position where decisions or steps that
are needed to ensure the survival of the business cannot be taken when
they need to be. This could mean either a lucrative business opportunity
is missed or that an expensive Court application is needed. Either way
the result is detrimental to your estate.
4. The final reason for making a Will is to ensure that your interest in
the business passes in the way that you want. So for example if you
have that children assist in the business while others do not, you can
draft your Will to take this into account.
You may therefore decide to ensure that your children who are involved
in your business inherit the shares, while the others take cash or other
assets. Doing this ensures both a fairness in the way your children are
dealt with, but also means that your children who do take a role in the
business will not to lose their livelihood following your death.
Additionally it means that they will not be forced to sell the business
to pay their siblings, a move which may mean they also lose out
If you own a business then making a Will really is something to consider
very seriously. The time and effort you have spent in building your
business, and its value to it may not be properly passed to your family
if you do not make a Will.
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