For anyone with any kind of business interest or business assets
For anyone with any kind of business interest or business assets, getting legal advice is one of the most important considerations. Legal advice for vital documentation such as shareholders agreements would seem obvious, but many people with business interests often overlook what should happen to their business assets when they pass away. Also, many business owners do not consider how their business would continue to operate in the event that they become incapable of dealing matters because of lack of capacity, be it temporarily or permanently.
Wills
If you do not have a Will, or if you have a Will in place but have not factored in your business, it is important to review your current arrangements.
Having a Will in place can ensure your business assets or interest will pass to whom you intend when you die. Without addressing this in your Will, your business assets or interest could pass to someone outside of the business and possibly to someone would have no interest in continuing to run it. The person would receive it might not have the necessary skills or experience to run a business. It might also pass to a number of different people, who may not have a good relationship.
Without a succession strategy in place, this leaves the business vulnerable and could potentially decrease in value if the right people are not left to continue the operation of the business going forwards. They might also make bad decisions in haste.
Sometimes it is more Tax efficient to leave business and shares to a family member, in which case there are actions we can advise you to take to ensure that your estate is Tax efficient, whilst ensuring that the business assets or interest pass to your chosen person or people.
The structure of your business can also determine how your estate would pass on death. For example, if it is a partnership, it might be addressed in the partnership agreement. If it is a company, it might be dealt with under the articles of association and/or shareholders’ agreement. It is therefore important to ensure that your Will does not conflict with any of these documents.
Inheritance Tax is also very important to consider, as passing on a business in your Will can sometimes trigger an Inheritance Tax liability. It could result in your executors having to sell some or even all of business assets or interests to pay any Tax due. However, depending on the assets or interests and if certain criteria is met, your business interests might be eligible for Inheritance Tax relief. Getting legal advice ensures that you have a clear understanding of your Tax position.
If you have any kind of business asset or interest, having a succession strategy in place is vital. This ensures that your business can continue after you have gone and by run by the right people. Planning ahead can also ensure that any Tax payable is mitigated and your estate is as Tax efficient as possible.
Lasting Powers of Attorney
There are two types of Lasting Power of Attorney; a Property and Financial Affairs Lasting Power of Attorney and Health and Welfare Lasting Power of Attorney.
Property and Financial Affairs Lasting Power of Attorney can be used to appoint one or more people to make decisions about a person’s property and financial affairs. This could include decisions about paying bills or selling a property. Your Attorneys can use this Lasting Power of Attorney at any time and you can include a condition that the Attorney can only make decisions if you lose the ability to do so yourself.
