Although you’ve put heart, soul and endless years of effort into growing your business you have to understand that, eventually, your business will have to be passed on so that your legacy can continue. There can be many reasons why this can be, whether it’s due to retirement, health issues or passing away. Either way, you should look to plan for the future and ensure that your assets are covered for when you eventually have to step away. One way you can do this is by creating a will and writing up an equity plan to prevent your business from being sold, broken down or shares being sold off.
When Should I Look To Draft A Will?
Drafting a will means that you’ll have the reassurance that your assets are protected and you can have a piece of mind when you’re not around. Sometimes, the tricky question can be when to actually draft your Will as although it’s good to draft it early, you may adopt more assets over time that you’ll also need to consider. It’s not simply planning for your retirement, a Will is much more than this. It considers the true value of your business and who will take it on once you leave. Who it goes to is entirely up to you and this will be taken into account when the business owner comes to create their Will.
Ensure You Establish The Intended Beneficiaries
Business owners always have someone in their circle that they can trust to pass down their business to, but it’s vitally important that the beneficiary feels the same way about it. Taking on a successful business is more than simply just making a few decisions. It’s a large responsibility that requires time and dedication in order for it to continue its success. In most family businesses, there always tends to be the assumption that passing it down to the next generation is the way to go but that particular family member may not feel the same way. So, when choosing who you wish to pass the business on to there should be questions you should ask yourself about the heir:
- Do they want to take on the business?
- Does it need to be passed on to multiple people due to the size of the operations in the business?
- What the tax implications?
If you’re still unsure about who should take the reigns, you can seek help through contentious probate solicitors who can advise you. If there are other parties involved, ensure they’re aware of what your intentions are too before going ahead and drafting your will.
Be Aware Of The Tax Guidelines
When you’re looking to retire and are in the process of writing your will, you’ll also need to consider the tax guidelines that are in place so these are not broken. Firstly, read up on the pensions lifetime allowance limit as overcompensating on this may mean that you pay more tax. Secondly, you should try to minimise inheritance tax as much as possible so that it doesn’t work out to be an expensive retirement instead. Finally, the transfer of interest is also something to consider as this will affect how successful your business will be.
Consider Future Plans When You Leave
Although you may be leaving the business, you may still have some good intentions for your business in the future. A will can be an ideal place for you to outline these plans so that business success continues for the future. You’re the one who knows the business from in to out so it would make sense for you to provide these future plans. Examples such as keeping the company ethos and value may be a priority of yours and you’ll want this to be remembered after you’ve gone. Ensure you highlight how you want the business to be run after you’ve gone because if you don’t, what you’ve built up for so long may be damaged by the next owner.
A Will can be the document that’s key to keeping the glue of your business together and will be the essential document that your eventual transition away from the business. There will be many factors to consider of the business before you go ahead, so if you need to seek help you should contact a specialist will writing solicitors who can help you through the process, or get in touch with an employment service to guide you through. They’ll be able to provide you with the information you need to ensure your will is thorough and every aspect is covered.
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