Probate is the process in which the validity of a will is established. As a business owner there is no doubt that you would like your business and assets to be passed onto family or loved ones as efficiently as possible. The last thing anyone wants is having to fork out their hard earned money to the government in the form of probate fees. These top tips will allow you to plan the division of your assets and give you peace of mind that the wishes within your will are carried out.
By placing your business in the ownership of a Trust it is not subject to probate. This requires you to have no ownership at the time of your death. The trustee then has sole power on the selling of the business, allowing them to decide the terms of sale. They are responsible for signing the deed. Trustees are required to carry out their duties honestly and fairly. It can be a tricky thing to set up and get right the first time so if you’re not 100% confident, then hire trust solicitors to take care of this for you.
If your business is owned in a partnership, then creating a deed that addresses the protocol if one of the partners dies will avoid probate issues. If this is not in place, then the remaining partner or partners must rely on the Partnership Act. This can create issues regarding the value of the deceased partner’s share in the business. Other partners may then gain the right to buy out the share of the deceased. Creating a partnership deed will prevent this and allow partners to state whether they want to sell or pass on their share to loved ones.
Having a succession plan in place will prevent various probate issues. This will state who holds ownership of the business. You will be able to consider the best interest of both your business and your family. You may want your family to own the business but leave the management to a co-owner or worker, this means you will need to set up an LPA. You will also be able to decide when the succession will occur. This can take place prior to the current owner’s death, allowing for consultation between the owner and successor(s).
To ensure you do not suffer any unwanted delays in the handling of your business and estate, you may want to hire probate solicitors. By hiring an expert in the field, you will be assisted in the continuity planning of your business. This form of planning prevents disruption to the business and its employees as well as reducing the burden and stress for executors. The value of your business and estates will also be preserved for the beneficiaries.
Particularly for small businesses, having the correct insurance is vital in order to prevent your assets and cash flow from being wiped out in the case of an emergency. Countless business owners find themselves filing for bankruptcy due to having insufficient insurance. Having the correct insurance protects your assets for your beneficiaries. Your insurance policy is dependent on your type of business, for some property insurance will be enough whereas others would need to consider an umbrella policy.