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In another recent blog , our Head of Corporate , Susan Clark explained the importance of business owners signing Powers of Attorney to choose somebody who could continue to run the business on their behalf should they lose capacity. Another important question for our business owning clients is what would happen to the business if they died?
One point to consider is whether they should appoint Special Executors in their Wills.
Executors are the people you choose in your Will to deal with your Estate. They have the responsibility of identifying and dealing with your assets, paying off any liabilities and tax and dividing your estate amongst the beneficiaries specified within the Will. They will generally be family or friends or Professional Executors such as solicitors.
In addition to appointing Executors to deal with the Estate generally it is also possible to appoint 'Special Executors' to deal with specific aspects.
This can be particularly useful where the main Executors will be family and friends who might not have detailed knowledge or experience of business matters. You can appoint Special Executors to deal with the business who have expertise in such matters and knowledge and understanding of your particular business. For example, the accountant to the business might be suitable.
It is not uncommon for business owners to want the business to continue after they have died for the benefit of their children. They may have spent many years of hard graft creating something to provide for future generations. The children may not be old enough or have the experience or knowledge to run the business, however, or may simply not have the inclination to do so.
It can therefore be crucial to have someone in place to ensure the business can continue to run smoothly on their behalf. In the long run, this can involve considering the structure of the business generally but the knowledge and experience of
Special Executors can be pivotal in the weeks and months after the business owner dies. Even if it is not intended that the business will continue in the long term Special Executors can ensure that the value of the business is maintained, protected and maximised while it is disposed of.
Another common issue is that there will often be key employees of a business who are important to its success. It can be important to think about how to incentivise them to stick with the business in the period after the owner dies. Their contribution to the success of the business can become even more important in the absence of the owner.
As Susan Clark said in her blog, we have had first-hand experience of businesses folding because sole Directors and principal Shareholders did not plan ahead. Your Will, Special Executors and motivating key employees are all part of the issues you should be considering.
For further information contact Susan Clark at ku.oc1701695673.fcl@1701695673kralc1701695673s1701695673
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