Too many make assumptions as to what would happen in such unfortunate circumstances. For example, did you know:
- If a Director or Partner loses mental capacity, they cannot simply be removed just because the company’s documents say they can – the law now prevents this. Fortunately, there is a simple solution.
- If a company’s documents require that your Personal Representatives must sell your company shares to the existing shareholders or partners, your estate will lose the benefit of Business Property Relief. This can be avoided!
- If you leave your share of the business to your spouse or civil partner and they later sell it, it will fall into the value of their estate for Inheritance Tax purposes (and be exposed to care fees, creditors or remarriage). There is an alternative that avoids this!
In these two articles we consider how losing mental capacity can affect each type of business, and how business property can be passed on in a tax efficient manner.
Whether you own a sole trader business, shares in a partnership or shares in a private limited company, you need to consider the issues raised in these articles as part of the estate planning process.
Anyone can lose the ability to make decisions for themselves at any age, due to an accident or illness. We consider how each business structure can use a business LPA to ensure business continuity in such circumstances.
Aside from the family home, shares in the family business can be one of the most valuable assets that a testator has. But leaving these shares in your Will is not as straightforward as you might imagine.
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If you are interested in making a Will and/or Business Lasting Power of Attorney with April King Legal, get in touch: