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The Importance of Wills for Business Owners
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An essential part of running a successful business is knowing what will happen when. Click here to learn why.
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The Importance of Wills for Business Owners
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For business owners, drafting a will is essential – but not all people do it. And, even if you don’t do it, if the total value of your estate amounts to more than £325,000, there’s inheritance tax to pay. The current rate of inheritance tax is an eye watering 40%, which means that any value beyond that threshold will be much smaller than you may think. Avoiding paying more inheritance tax than you should is one benefit to writing a will, but there are many more.
Below, we’ll explore the significance of wills for business owners. We’ll include some things to consider to avoid potential disputes and ensure business continuity.
Legal Complexities of Business Inheritance
There are lots of legal complexities with business inheritance. It’s not just about assigning assets. It involves:
- Understanding business law
- Understanding inheritance rules
- Ensuring compatibility with company articles
- Partnership agreements
- Shareholder arrangements
All of that needs expert legal guidance.
An effective business will
Creating an effective business will require proper planning. You’ll need knowledgeable guidance to avoid missing any key details, and to ensure that you’re providing clear directives for the future of the company. You’ll also want to consider how shares or partnership interests are transferred. A proactive approach is crucial. It’ll prevent disputes, ensure smooth succession, and maintain the integrity of the brand.
Inheritance tax and continuity
For business owners, understanding and planning for inheritance tax implications is essential. We’ve already highlighted the eye watering 40% tax rate, but did you know you can get business relief for inheritance tax on either 50% or 100% on some of an estate’s business assets?
Strategic planning is essential to minimise taxes on anything you can’t claim on. The will should also address business continuity, offering a guide for maintaining operational and financial stability. For some companies, this isn’t always easy. Large operations are tricky to manage, as is financial stability with SMEs.
Often, continuity is essential for beneficiaries relying on the business.
The role of will dispute solicitors
Will dispute specialists are integral for business inheritance. Their role extends beyond drafting a will. They anticipate potential disputes and ensure the will can withstand legal challenges, offering a comprehensive and clear directive to the will’s executor – one that won’t be challenged or ruled invalid when you’re no longer there to explain. Their expertise in inheritance law is invaluable. They’ll protect the business from disruptive legal battles, preserve the company, and ensure the owner’s wishes are respected.
Now is the time to begin thinking about a business will, whether you’re running an SME or a larger enterprise. It’s rare for a business owner to intend for the business to simply stop trading; if you want your hard work to avoid going to waste, then a strong will secures the future of the business. It’ll ensure it continues to thrive and support beneficiaries as intended.
