If you don’t already know, a Will is a very important document and is vital to estate planning and ensuring that your assets are handled in the right way when you pass away. However, there are still a lot of people who feel as though they don’t need a Will because they are young. In some instances, many people wait until a certain event makes them realise just how much they need a Will.
Making a Will ensures that those you leave behind have clear instructions in regard to your wishes. If you own a business, then it is even more important to make sure that you create a Will. Have a think about what would happen to your business if you passed away. Who would take care of it, who would manage it and what would actually happen to your clients?
The following are a few key points you need to think about:
Running the Business
Who would take care of either running the business or winding it up in your absence? Would your children or spouse step in and would they be able to cope? It is a big responsibility and is something that they might not want or there might be someone you want to run it for but if you don’t have a Will, this might not happen.
Inheritance Tax Planning
When it comes to inheritance tax planning, there are certain things that have to be considered if you own a business, such as whether your business qualifies for business property relief. Ensuring your Will is drafted in a tax efficient way could save your loved ones an unnecessary tax bill in the future.
Company Shares
You might own company shares that are subject to pre-emption rights and you may have a cross option agreement in place in respect of this.
Sole Trader
If you are a sole trader then you might need to consider the effect of your death on your business as it immediately terminates when something happens to you.
Business Interests
You might not realise but your family might not want to be involved in your business and will want to sell the shares if they inherit them. Do the other shareholders in the business have the ability to buy the shares?
Life Cover
You will need to think about life cover as you need an adequate amount of cover to provide for your family and also ensure there are funds available to shareholders to purchase the shares from your estate.
The above shows that it is not only vital to get a suitable Will in place but to also ensure you seek advice from a professional.
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