Having a will in place is essential if you want the final say in what happens to your business and other assets after you die.
If you die without a Will, everything you own – including business and non-business assets – will be distributed under the laws of intestacy. This means that you or your loved ones will have no say as to who inherits.
Of course, when it comes to writing a Will, you have a plethora of options. You can even buy DIY kits from the high street, do it online, or get advice from forums and write your own. And, if you are looking to save money, these can be tempting options.
But, when you own a business, not using a professional lawyer or Will writer is almost always a mistake.
Common mistakes with a DIY Will include:
- It’s not signed or dated
- It’s signed in the wrong place
- It doesn’t have the necessary number of witnesses
- The wrong person has witnessed the Will (e.g. a witness must not benefit from a Will so any family member you want to inherit cannot sign it)
- The Will fails to cover all your assets
- The Will fails to consider issues around inheritance tax, executors and trusts.
Even the smallest of mistakes could render a Will invalid, so expert advice is always recommended. But when you are a business owner, it is even more important that your Will is drafted by a professional. Not least because, if you own a business (or shares in a business), you will probably want to create your Wills in a tax efficient way to help minimise inheritance tax.
When you die, any shares or interest you own in a business become an asset of your estate. Without a Will, these shares could be sold, the company could be broken up, or it could run into trouble without the correct day-to-day management in place.
For example, you might know who you want to inherit your business after you die, but what happens if there is a tragedy and these people don’t survive? All eventualities should be considered and only a professional lawyer or Will writer will know what questions to ask to make sure that your Will covers all situations.
In some cases, you might already have a partnership agreement or company papers in place that set out what will happen to the business after you die. These types of contracts are usually put in place if more than one person owns a business and you want the company to continue after your death. However, to avoid your assets being dealt with under the rules of intestacy, your Will should detail who will receive your shares.