YBC Academy : Writing a Will
WHY DO I NEED A BUSINESS WILL?
Business entities, just like people are subject to the cycles of life which can unfortunately include the demise of owners and partners. Cases of partners passing away and leaving the remaining business owners straddled with debt or forced to fight for their share of the business with the dead partners family members are all too common. In addition, legal fees accruing from lengthy court battles to determine how the business should be shared out between the remaining partners and the deceased’s family can wreck havoc on business finances and even lead to bankruptcy and closure in extreme events. Fortunately, it is possible to avoid these possibilities from becoming a reality by drawing up a Will to determine the courses of action that should be taken when a business owner passes away. The following are a few important reasons why you need to have a estate planner draft a Will for your business.
1. To settle the issue of continuity
A business, especially one which is run by partners rather than being a limited company can usually only continue to run if all partners are alive and well. Moreover, many partners also have personal finances and assets invested in the business and are liable for any debt that the organization incurs. As a result, partners have the option to stipulate whether they want a family member to take their place and help to run the business in the event of their own death. This helps to ensure that the business will continue to operate even after their death, and avoid squabbles and legal procedures between the deceased’s family members and the remaining owners.
2. Settle outstanding debt
A business can help you to specify which of your assets may be liquidated to pay off any debts that your business may have taken and avoid cases where a creditor descends on your home and other assets to demand settlement at the expense of your family’s comfort.
3. Facilitate transfer of ownership
Should your family members display a lack of interest in taking over your place in the business, you can ask your Willwriter to insert clauses to the effect that the other partners have the option to purchase your share of the business and pass proceeds of the sale to your family.
Having a business Will in place will ensure smooth handover of the business to either a family member that would wish to take your place, provide for the settlement of any outstanding debts that you are liable for, and give your partners as well as your family the option to transfer ownership if either party is unwilling to continue with the relationship. A good estate planner will help you to decide on the best option for you and help you to draw up the necessary legal documents to ease the transition for your business and family upon your demise.If you would like to know more about this subject or any other YBC Academy information, please enter your details below and we will make contact as soon as possible.