Running a business is hard work with plenty of plates to spin. While many business owners focus on money matters like cash flow and setting budgets, they often forget to plan for unexpected events such as death.
Talking about death isn’t easy, and many avoid it. But for the good of your business, it is important to think about it. Two main tools to help with this are Wills and Lasting Powers of Attorney (LPA).
Understanding Wills for business owners
A Will is key for the continuity and legacy of your business. In a Will, you can choose who gets your business assets to avoid any conflicts between the remaining shareholders and staff.
It also lets you decide what happens to your business in the future, like selling it or letting someone else run it.
If your family is involved in the business, you can pick guardians for your children to make sure they’re looked after.
A Will can also help reduce Inheritance Tax (IHT), so your family gets more.
By giving clear instructions on how to pay off any debts, you can keep your personal and business assets safe.
Business Property Relief (BPR) is also available and can reduce the IHT on things like company shares. This can give up to 100 per cent relief when such assets are left in a Will.
Lasting Powers of Attorney (LPA)
LPAs let you choose someone to make decisions for you if you lack the mental capacity due to illness or old age.
Without an LPA, there might be delays in accessing your business money if you were to lose mental capacity.
With an LPA, the person you pick can quickly handle money matters, like paying staff. They can also make big decisions, like renewing contracts or looking after business properties.
The LPA for health and care is more personal and is about your health and daily life. It might not seem linked to your business, but it is.
If you are ill, this LPA lets your chosen person decide how involved you should be in your business. This means there’s always someone looking out for your business, even if you can’t be there.
It is important to seek legal advice while considering a contingency plan for your business. If you are a business owner and would like to explore your options further, please contact us today.
Mander Hadley Solicitors is not only a long established firm, but is vibrant and successful, with a forward thinking approach.
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