Estate planning

Susan Maxey, legal director at Womble Bond Dickinson, shares her tips for entrepreneurs and business owners when planning for the future

Entrepreneurs and business owners are, by nature, focused on running and growing their business. But this can mean many neglect to put effective estate planning measures in place.

At Womble Bond Dickinson, we help entrepreneurs and business owners protect and plan for their future, both for the succession of their business for future generations and by providing advice in anticipation of an exit.

Reviewing the structure of the business

Many businesses qualify for 100 per cent business property relief (BPR) from Inheritance Tax (IHT), meaning that the shares of a deceased shareholder can often pass to their chosen beneficiaries free of IHT. Many business owners take this relief for granted. However, if a business includes non-business assets or non-trading activities, this relief may not be available. We can assist with a review of your business to maximise the availability of BPR.

Will planning

Under the intestacy rules, which apply if a person dies without making a will, only limited provision is made for a surviving spouse if there are also surviving children. Some business owners may also want to ensure that their spouse is provided for, but in a way which preserves their assets for the ultimate benefit of their children, which the intestacy provisions or a simple will cannot provide for. A will drafted by a specialist lawyer can not only minimise the potential liability to IHT, but also provide flexibility to deal with whatever circumstances the family may face following a sudden death.

Lasting Powers of Attorney (LPAs)

If a shareholder becomes unable to make business decisions or deal with their shares, but has completed a Property and Financial Affairs LPA appointing someone to take on that role, this will ensure there is minimal delay in making key decisions.

The alternative is an application to the Court of Protection to appoint a deputy to make such decisions, but this can take months and the deputy has to act under the direction of the court. We can deal with all aspects of LPAs, from preparation to registration, as well as acting as an attorney if required.

Planning for an exit

Too frequently, entrepreneurs exit a business without thorough consideration to the form that exit should take and may suddenly find themselves with cash on which IHT would be charged in full on their death. If the right planning is undertaken to reorganise their business interests pre-exit, it ensures that some or all of the proceeds, are protected for their family.

Creating the right team

In all of the above areas, having the right advisers to provide specialist support is vital. This is likely to include a tax adviser, solicitor and financial adviser. If a business exit is anticipated, additional support may be required from corporate specialists and the business is likely to need its own advice. Investment advice will also be crucial if an exit is going to generate significant cash proceeds. We can put you in touch with the right people to make sure that you get the advice you need at every stage and with a team of corporate lawyers in-house, we can assist with any business reorganisation or review of governing documents. We are equally happy to work with your existing advisers, or to assist you with setting up a ‘beauty parade’, if you are looking for new advisers.

Womble Bond Dickinson
www.womblebonddickinson.com
@WBD_UK

Share
Related
Scroll to next article
Go to

The disruptive effect