Does my Will deal with my business?

For many people, their family business is their most valuable asset. Once a person has decided on the structure of their business it is crucial they plan their business succession to ensure they protect the best interests of the business and their family. A well thought out business succession plan not only affects the owners of a business but also their family members and beneficiaries in the event of their death.

What your Will can cover?

Your Will sometimes sets out who inherits your shares or your interest in the business. This can provide certainty, ensure there is a smooth transition and help avoid disputes. If you are the sole owner, your Will may direct that the business be sold, and the proceeds distributed to your beneficiaries.

What can’t my Will deal with?

Many people believe their Will can transfer all of their assets to their loved ones when they pass away. This can have significant consequences when assets are held in entities such as companies or trusts. It is important to review:

• Company structures: If the business is run through a company, your Will only deals with the shares you own, not the company assets.
• Partnerships: Partnership agreements often set out what happens if a partner dies, which can override the wishes in your Will.
• Trusts: If the business operates through a family trust, your Will does not directly control trust assets, and the assets will be dealt with in accordance with the Trust Deed.

Why planning is essential?

To avoid the risk of your family members having no control over your assets when you pass away, a properly devised business succession plan can provide a more thorough understanding of how the business will continue to operate or be distributed. Without clear planning, your family may face uncertainty, delays, or even disputes after your death. Business succession planning, alongside your Will, ensures a smooth transition, protecting the value of the business, and supporting both your family and employees. In the event you do not have a succession plan in place, the Executor of your Will may be burdened with the task of handling the operations of your business and nominating an alternate person to take on the role of carrying out the best interests of the business.

What can I do?

Your Will is an important part of protecting your family business, but it is only one piece of the puzzle. To make sure your wishes are carried out, it is essential to review your business structure, agreements, and succession plan regularly with a lawyer.

Thinking about the future of your family business? Our estate planning team can help you ensure your Will and business succession plan work hand-in-hand.

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