Upon death, have you made provision for your business assets?
If you are a business owner and want to make sure your assets are protected once you pass, this article is for you. Whilst uncomfortable to think about, it is advisable that you decide who you want to leave your business assets to, in the event of your death. This is known as Succession planning.
For some, the decision might be to leave everything they have worked towards to family and loved ones, but for others they may wish to leave their business assets to a business partner or charity. There is no right or wrong answer as to who should benefit from your business assets, but we strongly urge for careful consideration and prior discussions to determine what happens to your business on your decease.
Potential repercussions of not making provision for your business assets
We can appreciate that having a business in itself requires significant management and the thought of making provisions in your Will is time-consuming and overwhelming. However, if a Will is not made, your assets will pass under the Intestacy Rules. If you do make a Will, and do not clearly state who your business assets should go to, they will be considered like any other of your assets.
The risk here is that your beneficiaries may end up owning a share or the whole of your business without that being your intention. More concerningly, you might have a business owner who themselves will not be in agreement with this being enforced.
LPAs for Business Owners
Having a Lasting Power of Attorney in place for your business assets is equally as important as having provisions set out in a Will. By having an LPA for your business, you are ensuring that someone you trust assists you with your business when you are not able to run the business yourself. For instance, if you are not in the country and unable to make an important business decision or perhaps need assistance with your business going forward (e.g. health care needs which made limit you in certain ways).
It is important to understand that a business LPA is enforceable even when you do have capacity and therefore takes immediate effect.
If you have any queries about anything discussed in this blog, please do not hesitate to contact [email protected].