1. What Is a Will, and Why Does It Matter?
Most people know what a Will is, but most people don’t know just how important one can be.
At a high level, a Will is a legal document that determines how your assets, including your business interests, are distributed after you pass away. Without one, the UK’s intestacy rules decide who benefits from your estate. This can lead to disputes, delays and risks your assets being passed to someone other than those you wanted to benefit.
Without being legally prepared, the surviving shareholder/s may inherit a new business partner and the loved ones of the deceased shareholder may inherit shares in a business they do not want to run.
2. How Does This Affect Your Business?
Many business owners don’t realise their personal assets are linked to their business.
Without a Will, your business might face delays in transferring ownership or even risk closure.
Family members may inherit your share, but lack the expertise to run your business. Your business partner may gain a new unwanted business partner.
3. Key Considerations When Writing a Will:
- Include your business in your Will; specify who should inherit your share.
- Ensure your Shareholder Agreement is up to date.
- Appoint an executor who understands your business interests.
- Consider tax implications and work with a professional for estate planning.
4. Key Benefits of Having a Will
- Protects your business and ensures continuity and smooth ownership transition.
- Prevents disputes.
- Reduces the risk of family or business partner conflicts.
- Safeguards your family by clarifying your wishes and supports your loved ones financially.
- Saves time and money and avoids a potentially lengthy and costly probate process.
5. Next Steps
- If you don’t have a Will, now is the time to act. Do not keep putting it off.
- If you have a Will, make sure it is up to date.
- Consider speaking to a Solicitor to help draft or update your Will and review your Shareholder Agreement.
- Consider speaking to a Financial Planner to review your legacy plan including your life cover needs.
- Read our next blog: Shareholder Agreements – Protecting your business partners, you and your family
About the author
Adam Downes is the founder of Pura Vida Financial Planning. As a Chartered Financial Planner, he specialises in helping business owners achieve financial security and freedom.
You can find out more about Adam at www.puravidafp.com/adamdownes
