If you own a business, you need to make sure it’s protected when you pass away, which is why this week, Prestige Tax and Trust Services explains how to leave a business in a will.
The Purpose of a Will
The purpose of a will is to ensure your financial assets are protected when you pass away, as well as to lay out your wishes on how you desire your estate to be handled. This allows you to make sure that your assets are passed on to people you care about.
This becomes doubly important for someone when they own a business. Not only is it one of your most valuable assets, but you need to ensure that any transition of ownership is as smooth as possible, both to protect your life’s work, and any employees who work for you.
How Can a Sole Trader Leave a Business in a Will?
That is why you need to ensure you outline what you wish to happen to your company in a will. However, how you go about doing this entirely depends on how much of the business you own.
If you are a sole trader, and own 100% of the company, the process is fairly standard. You choose your beneficiaries, draw up a will, sign it and have it witnessed, much as you would with a normal will. That’s why you need to know how to make a will in England, Scotland, Northern Ireland etc.
What Happens When You Have a Partnership Agreement?
If you don’t own all of your business, the matter becomes slightly more complicated. If you are in a partnership, it matters whether you have signed a partnership agreement beforehand. If you haven’t, you can outline what you wish to happen to your shares in your will.
If you have, you may be bound by the partnership agreement, which will limit what you can do with your shares. In this case, you need to check the agreement for any exit provisions, which will allow you to exit the business and sell any shares.
However, most partnership agreements have provisions to outline what happens to the business once you die. If they don’t, or if you are unhappy with these provisions, the best way to protect your business is to renegotiate the partnership agreement.
Passing Your Business on in a Will Requires Legal Expertise
Whether you are dealing with a partnership agreement, or simply leaving a business in a will, you need legal expertise to ensure your company is protected once you pass away. With its specialist business protection service, staffed by business law experts, Prestige Tax and Trust Services is on hand to offer that expertise.