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Business owners can cause big problems for their families and companies if they do not make a will.
Many bosses in their 30s and 40s have not yet made a will, according to Mortgage Strategy.
It says serious complications can arise unless a well-drafted will is included in succession plans for director shareholders. Failure to draw up a will can also cost families in taxes.
A firm can qualify for inheritance tax exemptions but the benefit is lost if assets pass to the surviving spouse outright. If a business is sold on death and if the proceeds of the sale pass to the surviving spouse they will be liable for inheritance tax purposes. Careful planning to ensure a spouse can benefit from the full proceeds is required.
If an estate is worth more than £125,000 at the time of death and the deceased was married or in a civil partnership then the wife, husband or civil partner will receive personal items such as cars but nothing used for business purposes.
Jane Kenyon, associate in the Private client practice, comments: "If wills are set up correctly, in some circumstances, business owners can make use of any exemptions potentially available twice, meaning that more funds are passed down to the next generation free of tax."
