Business protection wills

What happens to the ownership of your business on death? There are a number of devices that may regulate this such as memorandum and articles of association and shareholder agreements that may provide the surviving business owners the option to acquire the deceased’s business interest.

But what happens to the value in your business? The fact is that most people in business would prefer to pass that value to their family, who more often than not have no involvement in the business.

Discretionary trust

Providing there is a qualifying business interest it is possible to gift the interest through a will into a discretionary trust without any inheritance tax.

Once the business interest is in the trust the surviving business participants, through means of a pre-existing cross option agreement, may approach the trustees to exercise their option to buy the business interest.

One important aspect is creating the ability to fund the purchase. Each of the business owners lives should be covered by life insurance, the proceeds of which on death are paid out for the benefit of the surviving business owners. The amount of insurance will as far as possible represent the value of the deceased’s share in the business.

The discretionary trust may then sell the business interest and hold the cash proceeds for the benefit of the surviving family.


  1. Secures value in the business holding.
  2. Creates an exit strategy from ownership for the surviving family.
  3. The trust provides the family with ongoing access to the wealth

Additionally, it protects the wealth from:

  • Inheritance tax in the survivor’s estate
  • Second marriage and subsequent dilution
  • Children’s lifestyles and inappropriate spending habits

The discretionary trust is still a good route to take even if you have family members involved in the business. This creates flexibility and can adapt to currently unknown circumstances that may be relevant to make a decision several or many years ahead.

Check our step-by-step guide on the process for making your will.

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