Estate Planning for Business Owners

We can assist business owners with planning for the future, and ensuring individual directors have planned their estates complying with shareholder agreements and at the same time limiting their own exposure to tax

How can we help?

Cross Option Agreements

Where there are several owners of the business complications may arise if a shareholder dies. A cross option agreement is where each shareholder gives the other shareholders the right to buy their shares in the event of their death. Life assurance can be put in place to cover the cost of this. This avoids the risk of third parties becoming shareholders in the business

Tax Advice and Wills

Shareholdings in a trading business are exempt from inheritance tax but if they are subject to a cross option agreement this relief wouldn’t apply to the proceeds of sale. However, a Will can be constructed so the shares or the proceeds of sale can be held in trust reducing the exposure to inheritance tax

Family Owned Businesses

Passing ownership of the business to other family members can be difficult. We can set up different share holdings to pay income without giving away voting rights. We can also use trusts to allow income to be distributed without ceding control of the business

Pension and Life Assurance Nominations

You need to complete a nomination (sometimes called a letter of wishes) to say who benefits from the assets remaining in your pension when you die. It is important that this is a detailed document to take account of various scenarios that might arise. Similarly, life assurance and death in service nominations can be used as part of estate planning so it is important these nominations are up to date

Lasting Power of Attorney for Property and Financial Affairs

It is important that directors of a business  have put in place Lasting Powers of Attorney as if one or more of the directors lose capacity (even for short period for example an induced coma)  this could seriously handicap the operation of the business as they will be unable to carry out their duties.

Lasting Power of Attorney for Health and welfare

You should also consider LPA for health and welfare giving a loved one authority to make these decisions if you have lost capacity to do so yourself.