Running a business takes hard work and long hours. Business owners will spend decades creating something of value; a business that not only supports their lifestyle but also provides for their family and employees, while impacting the wider community.
Despite this effort, one thing often gets overlooked: what happens when you’re no longer around?
Talking about death might feel uncomfortable but without a will in place, your business assets could fall into the wrong hands or worse, fall apart entirely.
Your Business Assets Won’t Organise Themselves
If you die without a will, your estate (including your business assets) will be distributed under the UK’s rules of Intestacy. These legal rules follow a strict formula, which doesn’t consider your personal relationships, your family structure or the setup of your business.
If you are the sole director and shareholder of your company, the risks are even higher. Until probate is granted and someone is officially appointed to manage your affairs, your business might grind to a halt.
In businesses with multiple directors or partners, the situation might seem less risky. However, confusion over ownership shares or a lack of clarity in succession plans can still cause delays and internal conflict.
A Will is Part of Your Business Continuity Plan
Most business owners take time to plan for growth and long term success. However, continuity planning is incomplete without a proper will.
A comprehensive business owner will allows you to:
- Choose who will inherit your shares, assets and interests
- Appoint reliable executors to handle your affairs
If you run a family business, a will helps avoid disputes by clearly laying out your wishes. In larger companies, it offers stability and boosts investor confidence. Stakeholders appreciate this level of foresight and reduced risk.
Safeguarding Your Family’s Financial and Emotional Future
Most business owners don’t build their companies just for themselves. The income often supports a spouse, children, extended family or close friends. Without a will, those people could face legal challenges during an emotionally difficult time.
A will brings clarity. It enables you to:
- Leave specific instructions
- Appoint guardians for young children
- Provide for dependants or vulnerable family members
- Reduce emotional strain during probate
By leaving clear guidance, you spare your loved ones from painful disagreements and prolonged delays in accessing resources.
Leaving Your Business to New Owners
Whether you can leave your business in your will depends on how the business is structured:
| Sole Traders | The business ends with you and its assets pass through your estate |
| Partnerships and Limited Companies | You can pass on your share but only according to existing legal documents |
If you’re part of a partnership or limited company, review your shareholders’ or partnership agreements. These documents might restrict who can inherit shares. You may need to update them, with agreement from other business owners, to ensure your wishes are honoured.
Even if your will specific your intentions, internal agreements often take precedence.
Inheritance Tax and Business Property Relief for Business Owners
Inheritance Tax can take a sizable bite out of your estate. Fortunately, Business Property Relief can reduce (or eliminate) the tax owed on business assets, if your business qualifies.
Business Property Relief usually applies to trading businesses. If your business mainly invests in property or stocks, it likely won’t qualify. HMRC assesses the business in full, reviewing its activities over time.
Do You Need a Will?
Our experienced team is here to help you protect your legacy with expert will writing and estate planning advice. Contact us today to speak with a specialist and discover how our personalised solutions can give you and your loved ones peace of mind.
01452 698 989 | office@willguardian.co.uk | Facebook
This article is for general informational purposes only and does not constitute legal or financial advice. While we aim to keep our content up to date and accurate, UK laws and regulations are subject to change. Please speak to a professional for advice tailored to your individual circumstances. Will Guardian accepts no responsibility for any issues arising from reliance on the information provided.