Everybody over the age of 18 with any assets needs to have a will, no matter what their marital status is. If you run your own business or have children, it is even more vital that your will is up to date to ensure your family (and your employees) do not have to deal with any issues after your death.
Recently there has been a huge leap in the number of professions and companies offering this service. Self-write packages are also available from mail order and even through the Internet. Unfortunately such packages often lack the correct legal advice resulting in the deceased’s wishes not being carried out if the will is not legal.
If you die without a will in place the government has a set of rules which determine how your estate (including your business) is distributed. Known as ‘The Rules of Intestacy’ they depend on the value of your assets and ‘how’ you own them, and your family structure. The rules then determine who gets what and it’s unlikely to be what your family and business want or need.
Protecting your business
If you have shares in a limited company you must check the Memorandum and Articles of Association of the company to see what actually happens to shares on death. Many require that the first step is to offer the shares to the remaining shareholders and only if they refuse to purchase them can they be sold or passed on to someone else.
Similarly, current legislation dictates that a partnership is automatically dissolved and the personal representatives of the deceased assume full responsibility for the distribution of the deceased’s assets (except where a partnership agreement has been drawn up clearly defining what should happen to a share upon death.) The law doesn’t state on what form this may take and the representatives are therefore under no duty to offer the deceased’s share to the surviving partners. What’s more they may insist that they become a partner or that the assets are sold and distributed.
Provision should also be in place now to appoint people you trust to make decisions on your behalf in the event of an illness, accident or a stroke.
‘Lasting Powers of Attorney’ (LPA’s) are documents made while you have sufficient mental capacity to appoint people to make decisions for you when you can no longer make them yourself; and they are more important than ever.
In 2007 the government appointed the ‘Court of Protection’ to take over running the affairs of anybody unable to make their own decisions who had not made such provision. Their powers include:
- Seizing all of your assets (including those in joint and business accounts)
- Making decisions on your behalf and appointing whoever it sees fit to carry them out
- Charging substantial annual fees for taking over the running of your life
- On-going fees for every decision made or action taken on your behalf (potentially running into £’000’s per year)
Many people in the UK are being directly controlled in this way by the government with over £3.2billion of assets seized and £23 million in fees taken directly from people’s bank accounts in 2011. Their control will last until you either recover or die regardless of the length of time.
The importance of writing your own will to ensure that your wishes and financial interests are protected after your death and the significance of protecting your own future should your business partner die before you cannot be understated. It is essential you take professional advice to ensure your will is going to do what you want and need it to, and not what the government wants it to.
WWW.CHIEFEXECUTIVE.COM
For Further information on becoming a member of the Academy contact;
Steve Knowles – Associate Chairman of Sheffield City Region and West Yorkshire – 07802 863880
