5 Reasons Why Business Owners Need A Will

Are you a business owner who doesn't have a valid will? What will happen to your business if you die without one? There are many reasons why you should make a will - here are the five most important.

By Tim Bishop

Up to 70% of people are without the protection of a valid or up-to-date will. Many of these will be business owners or directors. Failing to make a will can create a serious risk to family and business partners. Make sure that you are not one of them and that not only do you have a valid will but that it is updated at least once every five years to take account of changing personal, tax and business circumstances. As a business owner, you should make sure that in particular your will ensures that:

1. Your business continues to run after you die - failing to clarify who should inherit your business interests or how your business should be divided upon sale, could leave the entire venture in chaos.

2. That your business interests are inherited, within or outside the family, as you would wish. In particular, your will and any partnership, shareholders agreement or company documentation should adequately provide that your intended beneficiaries correctly inherit whatever company shares or part of your business you wish to leave them - this is particularly important as business documentation such as a partnership agreement can take precedence over your will in case of conflict between the two.

3. The will maximizes potentially significant tax savings including inheritance tax and various forms of business tax relief. Whilst good tax advice from an experienced wills solicitor can be highly complex, it can also be relatively simple and does not have to be expensive. However failure to make the most of tax relief for your business could prove incredibly costly—make sure you don’t leave most of your inheritance to the tax man.

4. A will properly drafted by a solicitor will help to prevent potentially highly divisive and expensive claims on your estate - claims even against your share of the business. Unnecessary litigation is absolutely lost thing your business needs after you pass on. Sadly arguments over who should inherit are becoming increasingly common, and can split families as well as destroy businesses.

5. There is adequate succession planning for directors.

A properly drafted will need not be expensive and even the most complex will is nowhere near as expensive as the cost of court proceedings to decide how to divide an estate following a challenge to the will or an invalid will. If you are a company director or own your own business, make sure your will is accurate, up-to-date and actually reflects your wishes - or get a new will drafted by a wills solicitor as soon as possible.

Tim Bishop is senior partner of Bonallack & Bishop, a firm of UK wills solicitors with offices in the south-west, offering legal services to private and business clients. Tim has headed the firm's expansion, seeing it grow by 1000% in the last 12 years. He is responsible for major and strategic decisions and sees himself as an entrepeneur who owns a law firm. Tim has firm plans for continued growth of the firm.