Wendy: Hello Peter, thank you for agreeing to take part in our Reputation interview this month. Most people know that it is important to have an up to date Will but could you please explain why it is so important for a business owner?
Peter: Hello Wendy, without a Will your entire estate including your business assets pass under the rules of intestacy. These rules are unlikely to reflect what you would really want. One example is that it’s highly unlikely that your spouse would inherit everything.
With a Will your Executors can be given powers to enable them to carry on your business. The law directs that any business owned by the deceased (other than limited companies) should be sold within 12 months. It would be an additional loss to the family if the business had to be sold at a knock down price just because during these 12 months trading conditions were tough e.g. in a recession. And what if you don’t want it sold?
Also most businesses are owed money. Your executors need the power to be able to collect that money. Without a Will they only get that power when probate is obtained, which could be many months after the business owner’s death, by which time the debtor could have disappeared.
Wendy: Are there any tax advantages involved with writing a Will?
Peter: Yes, by using a Trust created by the Will it is possible to massively reduce Inheritance Tax, and to protect the business. This especially applies to businesses whose value is likely to increase. But Trusts can also be used to ensure that the income from the business is protected for dependants such as children.
Wendy: Is there anything else important that a business owner should do?
Peter: Powers of Attorney go hand in hand with a Will nowadays when planning for the future. If you lose mental capacity through an accident or illness your family will have to apply to the Court of Protection to get control of your assets – this process will take about 9 months and cost several thousand pounds, by which time there may be nothing left of your business. A Lasting Power of Attorney solves this problem by appointing trusted people to manage your affairs if needed, before you lose capacity.
Wendy: That is great, thank you Peter. I know that at the moment you have an offer for our Reputation Academy and Platinum Reputation Advocates, could you tell us more please?
Peter: As you know I think the Crimson Crab offering is a fantastic concept for like-minded business people, and I would like to take mutual cooperation with other members forward by offering them a free standard will or wills (either a single will, or a pair of wills for couples). Every business owner must have an up to date will and I hope my Reputation Academy and Platinum Reputation Advocate colleagues will take advantage of this to ensure their affairs are in order.
Wendy: Thank you Peter for the great offer and some very useful advice it was lovely to talk to you today.