Even if you don’t want to think about it, the unavoidable circumstance of leaving your business will arise in your lifetime. Retirement, passing away or passing the throne are all eventualities, so if you don’t have a solid estate plan in place through a will, there’s a risk you could lose everything you’ve worked for.
Having an estate plan in place means you can be assured that your assets will be covered and dispersed in a way you wish. It helps to prevent them from being allocated in the courts of law and being surrounded in the uncertainty of whether your legacy will continue the way you wish. Writing a will allows you to outline how you want your assets to be taken care of which is why it’s important that you get one drafted before you retire from your business.
When should I draft a will?
It can be complicated to know when exactly you should write your will. It’s ideal to have it written early on when you gain your assets, but it should also be late enough so that you’re able to cover all the assets that you have. Many people might be quite early on in their careers as a business owner and, therefore, might feel it’s too early to create a will. Essentially, it’s up to the business owner, according to their plans for the estate, to determine when they choose to write their will.
As part of the estate planning, business owners would need to consider what will happen after they need to step down from their post or come into an unexpected situation where they would no longer be in their position. This means that you’d need to plan who will take the reins when it comes to it. However, there’s no guarantee that the beneficiary you choose would want to take over the position. This is where you need to consider a few factors to determine who would be the right choice:
- Who genuinely wants to take on the business?
- Are there several candidates that it could be passed on to?
- Will there be any tax implications involved?
It’s a big decision to make, so if you’re unsure at any point in the process, you can easily discuss the matter with contentious probate solicitors who can help you every step of the way.
You can also use Rocket Lawyer’s Probate service from £250+VAT.
When writing your will, there will be tax guidelines that you’ll need to consider, especially if you plan on retiring around the same time that you write your will. For example, the pension lifetime allowance shouldn’t be exceeded when retiring; otherwise, generally you’ll find yourself paying more tax. The inheritance tax could also be a large burden on the rest of your inheritors or heirs which you should be aware of. You may consider giving some of your assets as a gift during the lifetime of the business.
Writing a will can provide you with the opportunity to set out your long-term plan for the business. You’ll be able to provide instructions on how you expect the company to be maintained when you eventually pass away. For example, you’ll probably want the ethos and values of the business to continue long after you pass away. Neglecting such aspects could ruin the future of the business in the long-term.
Can I change my will?
In order for your current circumstances to be reflected in the will, it’s important that your will is kept up to date. This means you may need to make a new will when big changes occur in your life like a marriage or having children.
- The Importance Of Writing A Will As Business Owner - 25/04/2019