Often you will invest time, money and hard work in setting up your own business but when it comes to planning for the future of that business you may not be investing the same level of interest. As with any aspect of your business, you will want to ensure that risks are mitigated. By planning for the future succession of your business in your Will, this is one way in which to reduce the risks to your business and family.
Succession planning in your Will is a very useful tool to ensure that you have left clear instructions on how your business is to be managed on your death. Often people have an idea of how they wish their estate to be distributed on their death, however, in the absence of a Will your estate will be distributed in terms of the law and this may not reflect your wishes.
If you are a sole trader then the business may ultimately end on your death but you may own assets that you have used in the course of your business and by having a Will you can decide who is to inherit these.
While, if you run a partnership there may be provisions in your partnership agreement that result in your partners being required to purchase your business interest. While this may ensure a smooth transition on your death it can result in your estate losing out on certain inheritance tax reliefs.
If you have shares in a limited company you can ensure that family members inherit your business interests. This can be of particular importance where a member of your family has been actively involved in the business and is part of the succession plan of your business. Again, in the absence of an updated Will, your business interests and the future success of your business may not become realised.
You should also consider a Power of Attorney to ensure that in the event of your incapacity your business does not stop running day to day. There is no automatic right for your fellow directors or partners to take on your responsibilities and a Power of Attorney allows you to nominate individuals to manage your affairs.
Family dynamics can also be a significant issue to navigate around in planning for the future and while not every family business may be as complicated as the Roy family in the TV hit Succession, by speaking to your solicitor you can ensure the future of your business is secured.