It’s one of the hardest questions to ask yourself as a self-employed individual. What will you do with your business when you die?
Hard to answer, but answer, you must! No matter how far you are in life, or where your business sits in the status quo, it would help if you thought about what happens to your business when you’re no longer around to run it. Life continues to move on when we die. People step into our homes, our routines, and even our jobs like no one has ever walked there before – except in your case, where you are the leader of your business.
So, what do you do?
First, you must consider the structure of your business. If you’re a sole trader who runs their business alone, then you won’t be accountable to anyone else to decide on your business. It’s all on your shoulders as no one else has shares in your company. You can make decisions about estate litigation, money, and whether you want the company to continue running, and you don’t have to answer to anyone about that. The difficulty comes when you realise that you have partnered with someone else who has a stake in your business. It isn’t effortless when other people are involved, and this is why it’s essential to have it legally binding what happens to your shares.
Next, your decision about beneficiaries to inherit your business is essential. Most of the time, the recipients are your children and your husband/wife, but if they are not a consideration for you, you need to know where your business is going. You are able, of course, to choose to dissolve the business on your death. However, when a company is successful, it doesn’t make sense to do that! The biggest question to ask yourself is who is capable enough to run your business in the way that you would have done?
There will be options open to you when it comes to your business after you die. Many successful entrepreneurs are happy to sell their business and split the proceeds equally among children and spouses. However, you need to consider the implications of doing this and the implications of giving your business out to just one beneficiary. Both have their pros and cons!
You need to be able to dictate legally where you want your business and assets to go. It’s here you will need to have a comprehensive letter of intent placed into your will. Executors will carry out your wishes as you’ve asked based on this letter, and yet this letter may not be used in full. However, you can still advise who you’d like to be in charge, what you’d like for your business, and the access to all passwords that you would have used. Speaking to the right law firm to help you to make the right choice about your business and how you can divide your business as a gift in your will.