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If you own all or part of a business, then make a will

Home / Blog / If you own all or part of a business, then make a will

If you own all or part of a business, then make a will

Lifetime news

Posted on: 04/04/2014

Nobody likes to think about, or plan for, their death. But if you are someone who owns all or part of a business, then it is essential that you make a will.

Without a will, your shares in a company could be sold; the business could be broken up; or it could even collapse completely without the correct day-to-day running in place.

Why make a will?

If you die without a will, all your property (both business and non-business assets) will be distributed under the laws of intestacy – and you and your loved ones will have no say as to where your assets end up.

Generally, anyone over 18 and of sound mind can make a will. But there are certain factors that must be followed in order to make it a legal document:

• The will must be signed by the person making it (the testator) and two witnesses.

• The witnesses should not be beneficiaries under the will, nor married to, or be civil partners of the beneficiaries.

• A will must also appoint an executor, who will carry out the instructions written in the will.

A will should include instructions in relation to money – including pensions, insurance policies and shareholdings – property and personal possessions together with details of executor(s) and beneficiaries.

Intestacy rules

If a valid will is not made, then anything the client owns will be distributed in accordance with the intestacy rules. Through this method, the first person entitled to receive property is the surviving spouse/civil partner, if there is one.

However, they may not inherit the entire estate – that depends on the size of the estate and which blood relatives survive. Any assets held (in joint names, as joint tenants or tenants in common) will automatically be passed directly to the other joint owner(s) upon your death and therefore does not form part of your estate.

If the following circumstances apply, then the intestacy rules will be something you want to avoid:

• Client is living with someone but is not legally married or in a civil partnership, but they wish their partner to inherit some or all of the estate.

• Your client is legally married or in a civil partnership and has children, and they wish for the spouse/civil partner to inherit all of the estate (please note that a claim could be made against the estate in this instance).

• There are no living relatives and the client wishes to leave the estate to friends or to a charity (the Crown may take your estate if you die leaving no will and no surviving relatives)

• The client is legally married or in a civil partnership and does not want the spouse/civil partner to inherit anything

• The client is legally married or in a civil partnership but has no children

• The client is legally married/in a civil partnership and has children from a previous relationship, and they wish to ensure their children receive something from the estate

• The client has dependent relatives – for example, children under 18 – elderly relatives or relatives with a disability who have special needs and they want to make sure they are looked after and provided for (if you make a will you can appoint guardians to look after children and set up trusts in your will to provide for dependants)

• The estate is large and may be liable for inheritance tax; and the client may wish to make arrangements for tax planning.

In other words, if you die without a will and do not leave behind a spouse or children, then your estate will be passed to your parents, then brothers and sisters (or their children, if deceased) then grandparents, then aunts and uncles of the whole blood, then aunts and uncles of half-blood, then the Crown.

When to make a will

It is common to think that a will is not needed if a client is young or does not have much of an estate. But the sooner one is made, the better. If they are married or have children or look after dependants, then it is important to make sure they are properly taken care of when the client is no longer around.

If there is no spouse or dependants, and a will is not made, then assets will be passed directly to parent(s) or siblings. The client may, however, wish that some possessions go to friends instead, for example.

If the client wishes to leave anything to charity, this will need to be stipulated in a will. Funeral arrangements can also be made. In other words, a will can cover almost everything.

So if a client wants to have any say in what happens to their possessions or even themselves after death, then a will is one of the most important documents they can ever have.

If you own all or part of a business, then make a will

Lifetime news

Posted on: 02/04/2014

Nobody likes to think about, or plan for, their death. But if you are someone who owns all or part of a business, then it is essential that you make a will.

Without a will, your shares in a company could be sold; the business could be broken up; or it could even collapse completely without the correct day-to-day running in place.

Why make a will?

If you die without a will, all your property (both business and non-business assets) will be distributed under the laws of intestacy – and you and your loved ones will have no say as to where your assets end up.

Generally, anyone over 18 and of sound mind can make a will. But there are certain factors that must be followed in order to make it a legal document:

• The will must be signed by the person making it (the testator) and two witnesses.

• The witnesses should not be beneficiaries under the will, nor married to, or be civil partners of the beneficiaries.

• A will must also appoint an executor, who will carry out the instructions written in the will.

A will should include instructions in relation to money – including pensions, insurance policies and shareholdings – property and personal possessions together with details of executor(s) and beneficiaries.

Intestacy rules

If a valid will is not made, then anything the client owns will be distributed in accordance with the intestacy rules. Through this method, the first person entitled to receive property is the surviving spouse/civil partner, if there is one.

However, they may not inherit the entire estate – that depends on the size of the estate and which blood relatives survive. Any assets held (in joint names, as joint tenants or tenants in common) will automatically be passed directly to the other joint owner(s) upon your death and therefore does not form part of your estate.

If the following circumstances apply, then the intestacy rules will be something you want to avoid:

• Client is living with someone but is not legally married or in a civil partnership, but they wish their partner to inherit some or all of the estate.

• Your client is legally married or in a civil partnership and has children, and they wish for the spouse/civil partner to inherit all of the estate (please note that a claim could be made against the estate in this instance).

• There are no living relatives and the client wishes to leave the estate to friends or to a charity (the Crown may take your estate if you die leaving no will and no surviving relatives)

• The client is legally married or in a civil partnership and does not want the spouse/civil partner to inherit anything

• The client is legally married or in a civil partnership but has no children

• The client is legally married/in a civil partnership and has children from a previous relationship, and they wish to ensure their children receive something from the estate

• The client has dependent relatives – for example, children under 18 – elderly relatives or relatives with a disability who have special needs and they want to make sure they are looked after and provided for (if you make a will you can appoint guardians to look after children and set up trusts in your will to provide for dependants)

• The estate is large and may be liable for inheritance tax; and the client may wish to make arrangements for tax planning.

In other words, if you die without a will and do not leave behind a spouse or children, then your estate will be passed to your parents, then brothers and sisters (or their children, if deceased) then grandparents, then aunts and uncles of the whole blood, then aunts and uncles of half-blood, then the Crown.

When to make a will

It is common to think that a will is not needed if a client is young or does not have much of an estate. But the sooner one is made, the better. If they are married or have children or look after dependants, then it is important to make sure they are properly taken care of when the client is no longer around.

If there is no spouse or dependants, and a will is not made, then assets will be passed directly to parent(s) or siblings. The client may, however, wish that some possessions go to friends instead, for example.

If the client wishes to leave anything to charity, this will need to be stipulated in a will. Funeral arrangements can also be made. In other words, a will can cover almost everything.

So if a client wants to have any say in what happens to their possessions or even themselves after death, then a will is one of the most important documents they can ever have.

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