Your hard work and dedication to your business has meant that over the years you have built up a business for the benefit of your family, and on death you want to ensure that your family and loved ones are provided for.
But who would actually be entitled to your share of YOUR BUSINESS?
Certain restrictions may apply dependent upon whether the business is operated as a Sole Trader, Partnership or as a Limited company. In the case of a Limited company, what happens may be pre-determined by the memorandum of articles. They could state that other shareholders have the right to buy out your interest. If you wanted one of your children to inherit your interest in the company this may not be possible without further planning.
As a Sole Trader you may wish to leave your business to your child who works with you, and then divide the rest of your assets between your other children. Unless this is set out within your Will a family dispute could quickly arise if the other children feel they ought to be entitled to a share in the family business too.
If you die without a valid Will, your share of the business would be subject to the Laws of Intestacy and the person who inherits may not be the person you intended or may be someone who is unsuitable to carry on your business.
It vital that your Will clearly defines what happens to your interest in your business on death. Your Will needs to ensure your beneficiaries are able to inherit your interest, your company can continue to operate and this is dealt with in the most tax efficient way.
It is essential that you have a Will and that the Will reflects your own business situation. Ideally you should have put in place a succession plan that does not depend solely upon your death but which provides for the situation where you are unable to manage the business due to ill health or infirmity.
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