Partner Anne Elliott outlines how failing to prepare for the worst can often leave problems behind for loved ones and colleagues.
We are all aware of the dangers of not leaving a will. The potential for a family fall-out over who believes they deserve to receive what and why "Cousin Elsie should get nothing is well documented. The need to prepare for death is a fact of life.
Far too many business owners fail to consider not only their families but also their business when they die. For most, long-term planning is covered by working out an exit strategy that involves them staying alive long into their retirement, whether aboard a luxury yacht or tending the garden.
The problem with this is that none of us know what is around the corner. It is a sad truth that many business owners die before retirement and a large proportion have not made sufficient plans.
This is where so-called company wills come in. An example of a "company will is an agreement for the deceaseds family to receive cash with the surviving directors/partners receiving the deceaseds share of the business, usually by way of the proceeds of a life policy.
Directors of private companies/partners in business will want to ensure that their families are well provided for and secure the value of the business interest on their death.
Just as with a personal will, failure to adequately prepare for the future of a company can leave a legacy of heartache and turmoil with family and shareholders/partners in dispute and disputes are enormously expensive and distracting, particularly in hard economic times when money matters more than ever and businesses need to be run without distractions and uncertainty.
Does your business strategic plan include a provision (by way of a so-called "company will) which outlines what will happen to the business in the event of your death?