As a business owner, what should I consider when writing a Will?

Listen to this article

As a company owner, it is important to create a Will to ensure that the right people are taking on the responsibility of the business, along with business assets and/or shares. If a business owner or business partner fails to write one, it can leave behind a difficult situation for family and others involved in the business.

Why does my business’s structure determine how the estate is passed?

• For sole traders, your business will effectively come to an end when you pass, with your assets passing in your estate – either in accordance with your Will, or, with the rules of intestacy.
• As a partner in a firm, you can decide what will happen with the financial value of your partnership.

Understanding your documentation is important, as some may believe they are passing on a business to a family member when actually company documentation may prevent this.

Additionally, you should also take into consideration whether the terms of your Will are going to affect the majority shareholding and whether these are changes that you want. Ask yourself, if you are planning on leaving shares to a family member that has an interest in the business, are you happy for them to be the controlling shareholder? Or is it best that two family members have an equal shareholding?

As a business owner do I need to do anything to prepare for writing a will?

When talking with a solicitor make sure to bring all-important paperwork with you including;

• Shareholder agreement, or
• Articles of Association, or
• Partnership agreement

If these documents do prevent passing on assets to someone of your choosing, we would suggest reviewing that paperwork, as amendments can be made allowing your wishes to take effect – providing your fellow partners and shareholders agree.

You may also want to consider having a valuation of your business to hand, in order to understand the current worth of the business property or assets which form part of your estate. This may help you to apportion value between your chosen parties and it can also be a useful starting point for tax planning considerations.

Another thing we would ask you to consider is whether those assets are part of the business or are yours personally. For instance, many people accidentally intermingle the two and think they are passing shares in a property that is a business asset when in effect it is instead owned by you personally.

At Price Bailey, our Will writers are members of the internationally recognised Society of Trust and Estate Practitioners (STEP), and also hold advanced certificates in Will writing. We also have access to qualified accountants, solicitors, and tax advisors, which is crucial in particular for larger and more complex estates. If you would like advice or support writing a Will, you can contact Donna Mahoney, a Senior Manager at Price Bailey.