Why business owners need Wills

Why do business owners need Wills?

As a business owner, whether you are a sole trader, in a partnership or own shares in a limited company read on. You may need to take some action.

We believe that if you own assets or have children, you need a Will. There are some people, like business owners, for whom this is even more important.

If somebody dies it is obviously bad news but for business owners it can leave a real mess behind. If you die without a Will in place, the Rules of Intestacy apply. These rules are mainly taken from the Administration of Estates Act, 1925 and they remain largely as they when written nearly 100 years ago.

If you are married your spouse* doesn’t get everything. They only receive the first £250,000 of your estate and your personal possessions. They then receive half of the rest, with anything else going to your children. For business owners this can be a real nightmare.

How much is your business worth?

Whether you are a sole trader, in a partnership or own shares in the limited company, these rules will apply. The problem is that, quite often, the value of a business can be very high relative to the rest of your assets. Business owners often say, “My business is my pension” – but often forget that the business may be worth a significant amount. If this is you, in the unlikely event of your death your spouse might not receive everything. It’s even worse if you are not married, because then they will receive nothing from your estate other than joint assets.

It may also be useful if, within the Will, there are powers for your executors to carry on the business if you die. This will allow them to call in debts more easily before winding everything up. You might want to think about appointing separate executors to deal specifically with the business so that they can act quickly.

What can you do right now?

We do understand that times are difficult for businesses owners right now. This may all seem a little complicated and expensive. But, right now, at least get a basic Will in place that leaves everything to your spouse or partner then children. This will prevent the Rules of Intestacy from kicking in. The more complicated stuff can wait until things are easier – for now, just get SOMETHING in place. It’s one less thing to worry about. Click here to take action and DO SOMETHING GREAT.

Stephen Wilkes STEP Adv Cert in Will Preparation (Eng. and Wales), MSWW

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