I first met Duncan at a networking event around Easter. We got to know about one another's businesses and when I asked what protection he had in place for his business and his business asset in terms of his estate, he didn't know what I was talking about. He had a rough plan for his Will and his personal estate but had forgotten that the business he has built up has a value to his family beyond his monthly income.   

Pre Meeting

Duncan already had an idea on my prices, so I sent my Initial Client Email with useful prompts, factsheets and my terms of business and booked in an appointment. The prompts are great conversation starters between couples or if you are on your own, a way to guide you through what I'll be asking. 

Our Instructions Meeting

I covered the usual format for taking instructions for a Will. Formalities like full name, dates of birth and checking photo ID and then into the assets. Making a list of the main assets and wealth allowed me to determine whether inheritance tax (IHT) would be a factor on second death. 

Spousal Exemption means that when the first spouse dies, everything goes to the other partner completely free of IHT. Your allowances (£325,000 for everyone, and a further £175,000 if you are leaving a property eventually to your children) pass to your spouse and can be added to their own on their death. That means for a married couple, they can have a joint estate of up to £1million before IHT kicks in. 

Next we cover the Children and if any are under 18, named Guardians. Duncan is married with two children over 18 and no grandchildren as yet. They live in rented accommodation and have healthy ISAs, pension pots and investments. He is a joint Director of a Limited company employing staff. Their business focuses on alarms and CCTV for commercial and residential properties.    

I set up my business 10 years ago with a friend - did the hard slog and now we employ 22 people and it's become a bit of an animal! I am the main earner in my household and I hadn't given it much thought about what would happen to my business if I died or even had an accident and couldn't make decisions. I was a bit naive about what would happen to be honest.    

When setting up a business with more than one Director, it is worth having a document in place, signed by all the Directors, that outlines what happens when a Director wishes to sell their stake in the business; become incapacitated; and if a Director dies.

 When considering your business as part of your estate, there are a few things to consider - insurance, a Business Trust or Business Property Relief (BPR) Trust and having a business finance & property Lasting Power of Attorney in place in case you lost mental capacity due to illness or injury.

Insurance products exist to help with loss of income (income protection), critical illness cover and life insurance to pay towards your IHT liability or your mortgage or to give a lump sum to whomever you choose (paid first into a discretionary trust so as not to form part of your estate for IHT purposes). There are also insurances to cover a business - key person insurance (pays the business for the loss of revenue from the death of a key person in your business), life assurance, or shareholder protection with a cross over agreement. This one is vital if you have more that one Director with shares in a business. This covers the death of a Director, and pays the business so that the business can then buy out the estate of the deceased director. We work with multiple Protection Advisers we can refer you too if this is relevant to your circumstances. 

Next steps are to consider would you want the business sold on your death (if you own the business outright) or passed on to a family member. This determines if the business is readied for sale as a going concern or passed to say a spouse to look after the business until a Son or Daughter takes the helm. If its the latter, we can look into whether a BPR trust would be relevant. This gives a 50% or 100% reduction in IHT liability for your estate if the business qualifies. There are limitations but your Will writer will be able to advise if your business fits the criteria for this.

Finally, it is well worth considering a business LPA to cover the finance & property aspects of your business in the event you become incapacitated due to injury or illness. Having however many named Attorney(s) that have your interests at heart mean your business can still function to some degree - staff and suppliers can be paid, customers can be contacted and in some circumstances, service can resume. The end result being you either have a business to go back too if you recover, or a business to sell or pass on if you pass away. Legacy Protect Wills & Estate Planning can help get this in place for you.    

If this sounds like something you would like to include in your Will, or you have employees who you think would benefit from having a chat with us, then please do get in touch with us via our Contact page and we will be happy to discuss your circumstances and see how we can assist.