How To Write a Complex Will for Your Company Succession
Factors to Consider When Including Your Company in Your Will
Congratulations on building a successful business that you want to pass on to your loved ones after you’re gone. But, before you proceed with including your company in your will, there are several factors you need to consider. In this article, we’ll walk you through the process of writing a complex will that includes your business, ensuring a smooth company succession.
Understanding Legal Structures and Inclusion in Your Will
The legal structure of your business will determine how you can include it in your will. For example, if you’re a sole trader, your business is considered an asset and can be included in your estate to be passed on to your beneficiaries. However, if you operate a limited company, are a partner, or a shareholder, you can only pass on a share of the business. It’s essential to understand the legal implications of including your company in your will to avoid any complications down the line.
Simplifying the Process with Charity Wills
Writing a complex will that includes your business can be overwhelming, but you can simplify the process by using charity wills from organizations like Macmillan. These specialized wills cater to individuals who want to leave a business as part of their estate. While charity wills may come at an extra cost, the peace of mind knowing that your business will be passed on according to your wishes is invaluable.
Seeking Legal Advice for Complex Wills
While it’s possible to write a will without the help of a solicitor, seeking legal advice is crucial when including a business in your estate plan. A solicitor can provide guidance on the legal requirements and implications of passing on a business through a will. By consulting with a legal expert, you can ensure that your business is handed down to the right individual(s) in a legally sound manner.
Choosing the Right Beneficiary for Your Business
Selecting the right beneficiary for your business is a crucial decision that will impact the future of your company. Consider individuals who have the skills, passion, and capabilities to successfully run the business after you’re gone. Failing to designate a beneficiary for your business can lead to potential conflicts among your loved ones and may result in the business being mismanaged. Ensure that your wishes are clearly outlined in your will to prevent any misunderstandings or disputes.
Factors to Consider When Passing on Shares or Partnership Interests
If your chosen beneficiary does not want to take on a day-to-day role in the business, you may consider placing your shares or partnership interest into a trust for their financial security. However, the ability to pass on shares or partnership interests will depend on the articles of association or the business partnership agreement. It’s essential to familiarize yourself with the legal implications of passing on shares or partnership interests to ensure a smooth transition of ownership.
Understanding Inheritance Tax Implications
One of the key considerations when including your business in your will is the potential inheritance tax implications for your beneficiaries. Your beneficiaries may be required to pay inheritance tax on the transfer of the business, depending on its value and their relationship to you. However, Business Property Relief (BPR) may be available if your business meets certain qualifying criteria, reducing or eliminating the inheritance tax liability. Consulting with a solicitor can help you navigate the complex tax implications of passing on your business.
Conclusion
In conclusion, writing a complex will that includes your business is a significant decision that requires careful consideration and planning. By understanding the legal structures, choosing the right beneficiary, and seeking legal advice, you can ensure that your business is passed on smoothly to the next generation. Remember to factor in inheritance tax implications and explore options like charity wills to simplify the process. By taking these steps, you can create a solid estate plan that secures the future of your company for years to come.
