Small business owners – don’t be like Logan Roy, make sure your succession planning is watertight.
In the hit TV series, Succession, the future of the family business is left clouded in uncertainty when founder Logan Roy, played by Brian Cox, suddenly dies.
He leaves three of his children at loggerheads after promising each of them the CEO position. His unclear and inconclusive Letter of Wishes, accompanying his Will, simply serves to muddy the waters further.
The storyline highlights the importance of sound succession planning – particularly as a recent survey of UK family business owners by consultants PwC, found that just one in four has anything approaching a robust succession strategy in place.
The death of a business owner can have a massive impact on the future of a firm if they don’t leave specific instructions in their Will or make clear arrangements regarding company shares.
Inevitably, this can also cause stress, tension and potential heartbreak for everyone left behind, particularly family members – as the story of Logan’s children Kendall, Shiv and Roman so clearly illustrates.
How do you make sure your Will protects your business interests?
Making a Will and keeping it regularly updated is key to staying in control and being clear about exactly what you want to happen to your estate, including your business, after your death.
It also helps make sure that other people involved in the business, often family members, are not left in a difficult position.
Key things to consider are:
- Making sure your Will is clear about what you want to happen to the business and that this complements the structure of the business.
- Ensuring there is clarity about what you want to happen to the shares in the business on your death – and checking the inheritance tax position to maximise the chance of business relief being available to reduce, or completely get rid of, inheritance tax.
- Establishing now, while you’re still around, that the people you refer to in your Will, in terms of taking the business on, are willing and able to shoulder the responsibility. Communication is key.
- Considering a Business Lasting Power of Attorney (LPA). It’s important to look at what would happen to the running of your business if you lose mental capacity. Specialist legal advice is key to determine whether your business structure enables you to make an effective power of attorney for your business.
Get in touch
To make sure your Will protects your business as you want, please contact our Wills and Mental Capacity team. For advice on running your business, including a business health check service, please contact Commercial Services.