Stock image of business owner with employees at work in the background


Owning a business is not only hard work, but also incredibly time-consuming. It’s not surprising therefore that the primary focus of business-owners tends to be on day-to-day tasks and challenges, along with plans for growth and success.

But what would happen if something were to happen to you such as an accident, illness or death? Who would run your business? Who would make key decisions? How can you make sure that your lifetime’s work and your family’s livelihood isn’t jeopardised?

The majority of business-owners don’t consider estate planning until it’s too late, when in fact, just like business insurance, it is something that you should put in place at the outset. After all, none of us knows what is around the next corner.

Our estate planning checklist for business-owners is a neat summary of exactly what you need to consider:

1. Consider what happens to the business on your death

It might not be something that we generally feel particularly comfortable thinking about but it is important that you consider what happens to your business if something were to happen to you.

There are a number of options available to you:

  • You can wind the business up,
  • Leave it to family members, or
  • Give your business partners the ability to purchase the shares from your estate.

Whichever option you choose, it is vital that you make your intentions clear to ensure that your wishes are carried out.

Once you have considered what you would like to happen to your business when you pass, you can then plan what will happen with the remainder of your estate.

2. Your will

This is probably the most important document on the estate planning checklist. If you die without a will in place, your assets will be divided up in accordance with the intestacy provisions. Your business shares will pass to your closest relatives, often between your spouse and children. If you don’t have a spouse or children, your closest living relatives will inherit your estate.

This can be problematic for your business for a number of reasons, not least because shares may be divided up between a number of relatives.

Having a will in place which sets out your wishes can make things much easier from the perspective of the running of the business, while also easing the position somewhat for your surviving family.

3. Your lasting power of attorney

Something which is often overlooked by business-owners is the importance of having a lasting power of attorney (LPA) in place.

A financial lasting power of attorney enables you to appoint a trusted person or people to make decisions on your behalf if you were unable to do so. A lasting power of attorney can be implemented specifically for business decisions.

If as a business owner you lost mental capacity, for example through an accident or illness, assets could be frozen and this could cause severe disruption to your business. Without a lasting power of attorney in place, an application to the court would have to be made, which can take many months and the cost of this is significantly higher than simply implementing an LPA.

It is also worth noting that without an LPA you would lose the ability to choose who makes the decisions on your behalf.

4. Consider the use of trusts

Trusts can be complex, but can prove very beneficial, particularly where business assets are involved. For example, if you don’t want your beneficiaries to inherit business interests directly, putting them into a trust means they can still benefit from the shares without having to be involved in running the business.

Speaking to a specialist is essential to help you consider the various advantages of setting up trusts.

5. Tax planning advice

There are special tax reliefs available on certain business interests. Again, speaking with a professional can highlight the reliefs available and ensure that you have a plan in place which takes advantage of these tax planning opportunities.

6. Cross option agreement

Cross option agreements can be very useful where there are several business partners involved. It is important to discuss what each partner envisages happening to their shares in the event of their death.

A cross option agreement can be put in place between all shareholders of a private limited company. The agreement gives the other shareholders the ability to buy the shares of a deceased shareholder in the event of their death.

What to do next…

  • It is vital that as a business-owner you have discussions as soon as possible with business partners and family about what would happen to your business should anything happen to you. These aren’t always easy conversations, but I can’t stress enough the importance of doing this to protect all that you have worked so hard to achieve.
  • Then you need to speak to a Private Wealth Solicitor who has specific expertise in business succession, business wills and complex wills and estates matters. Your solicitor will advise you on the best way to protect your business, your estate and your family, and will take steps to put in place the necessary measures to do this.
  • Finally, you must keep all of your important estate planning documents together in a safe but accessible place, ready for when they will be needed. Don’t forget about them though. You should review them regularly to ensure they still reflect your wishes and that your circumstances haven’t changed. For example, a new marriage or the birth of grandchildren might alter how you would wish your estate to be divided.

For help with any of the solutions highlighted in our estate planning checklist, please don’t hesitate to give me a call on 01782 205000 or email I have extensive experience in private wealth, business wills and planning and am available for a chat at any time.