As a practice owner, your day to day will be consumed with the delivery of patient treatment and the task of managing, developing and growing your business. With the busy schedule of most practice owners, planning your own personal affairs usually takes a backseat as a result of this.
With many practice owners being key to the success of their business, succession planning is essential if you want to avoid any unintended consequences should you become seriously ill or die. As your estate will likely consist of both personal and business assets, there are various considerations required when planning for the future. However, an easy and fundamental starting point is to make a Will and Power of Attorney.
You should consult a specialist Solicitor with regards to making a Will. As part of this process, they can carry out a full review of your estimated Inheritance Tax position to establish what tax reliefs may be available against your personal and business assets on your death and factor this into the shape of your Will. A detailed discussion should also be had about who would like to benefit from both your personal and business assets on your death (your beneficiaries) and who you wish to have the authority to wind up your estate and deal with all the necessary tax administration (the Executor(s)).
The assumption that your estate will automatically pass to your spouse/civil partner or children if you don’t have a Will is incorrect. Without a Will, no family member will have any automatic powers to deal with personal or business assets on your death. Not having a valid Will is leaving matters outwith your control and has the potential to cause problems for both your family and your business. You also need to ensure that in the event of an untimely death, the business is not disrupted and there is a planned route to allow the business to continue operating.
As a further consideration, if you are in practice with others as a partnership or limited company, you need to have arrangements in place with your co-principals which address eventualities such as long-term illness or death.
The second step is to ask your Solicitor to prepare you a Power of Attorney.
By making a Power of Attorney you are confirming who will be your Attorney (or Attorneys) should you require assistance with running your finances, or if you become very ill, to make decisions about your welfare. You can only make a Power of Attorney while you retain the capacity to do so. Often individuals leave it too late to make a Power of Attorney as they have already become very ill. A family member then has to apply to the Court for a Guardianship Order, a costly and burdensome process which is not designed to assist individuals with complex business interests. Within the Financial Powers of a Power of Attorney, in some circumstances, provisions can be included which relate specifically to your business.
Whilst the development of your business will be your focus week to week, make sure that you do not neglect getting your personal affairs in order by making a Will and Power of Attorney.