What are Business Wills?
Business Wills are an agreement that usually takes the form of a buy and sell option. It ensures the smooth transition of the ownership of a business on the event of a death, total and personal disablement or trauma of an owner.
Funding for a buy out in a Business Will is critical, and is commonly achieved by appropriately held insurance policies. It is very important to ensure that expert advice is sought when taking out the policies, so that Capital Gains Tax is not triggered unnecessarily.
Advantages of Business Wills
A correctly structured Business Will, will have the following attributes:
- It can specify responsibilities, obligations, capital requirements, funding and management
- It will contain compulsory buy/sell provisions
- It avoids uncertainty for business & family as the process is structured and seamless
- It can contain restraint obligations, confidentiality etc
- It allows for a smooth transition of ownership
- Funding by life insurance relieves pressure on the business and continuing owners
- It deals with the event of a shortfall in funding
- It has an agreed formula to value the business on a trigger event
- It contains dispute resolution provisions
Our Wills and Estates team have provided many businesses from sole traders to companies with Business Will’s.
Contact our team today to discuss your wills and estates planning needs.