Estate planning for business owners is a critical process that includes planning for the transfer of your assets and the management of your business in the event of your retirement, death or incapacity. Here, Nikki Spencer, Senior Solicitor at Banner Jones, details the 6 essential considerations for business owners when it comes to estate planning…

Understand Your Assets and Liabilities
Create a comprehensive inventory of your business and personal assets. These could include your business, property, investments, personal property, and more. Also, list your debts and liabilities.

Set Clear Goals
Determine your objectives for estate planning. What are your priorities when it comes to the future of your business and your beneficiaries? Common goals include ensuring the business’s continuity, minimizing capital taxes, funding your lifestyle in retirement and providing for your loved ones.

Business Succession Planning
If you own a business, you need a solid succession plan in place. This involves identifying and preparing the next generation of business leaders to ensure a smooth transition of the business’s ownership and management. Options can include gifting the business, selling the business, gradual handover or transfer of management before ownership.

nikki spencer banner jones
Nikki Spencer, Senior Solicitor at Banner Jones

Wills and Trusts
Execute a Will to outline how you want your assets, including your business, to be distributed on your death. Your professional adviser will consider the liability to inheritance tax on your death and advise how best to minimize the liability. Establish trusts, to provide for the efficient transfer of assets, privacy, and potential capital tax savings. Trusts can be used as a way of protecting your assets until the beneficiary is old enough to look after the money or business themselves.

Business LPA
A Business LPA allows the person (the donor) to appoint an attorney who will be able to make decisions and act for them if they were unable to make those decisions for themselves. It can be used either temporarily if a business owner is on holiday or away for business, or permanently due to an accident or an illness meaning that they are no longer capable of acting. A business attorney must have the skills to carry out the role of the donor in a Business, and the donor should consider giving specific and detailed instructions on what powers their business attorney would hold.

Minimize Taxes
Work with an experienced estate planning lawyer to employ strategies that can help minimize inheritance tax, such as annual gifting, charitable contributions, and valuation discounts.

Estate planning for business owners is a complex and evolving process. Consulting with legal and financial professionals who specialize in estate planning for business owners is highly recommended to ensure that your plan is both legally sound and tax efficient.

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