For business owners, the preparation of a will involves more than simply deciding who should inherit the value of the estate. Proper thought must be given to the continuity of the business and how control of it should be passed on. If your will does not plan ahead, the shareholding could pass to someone who does not want the responsibility or has different objectives than what you intend.
What is a business will?
A business will is best described as an extension of a normal will that addresses the continuity of a business. It typically contains instructions concerning the transfer of ownership and control of the company and sets out the rights, duties and obligations of those involved.
The main goal is to ensure that your objectives for the business are achieved. For example, some business owners want to ensure that a family business can pass to the next generation and generations to come, whereas others see the business more as an investment that will ultimately be sold. Their priority is not succession planning, but to ensure the proceeds of sale are passed to the family in a tax-efficient way.
Can I leave a business in a will?
If you operate as a sole trader then your business will end when you die. The business assets will pass to the executors of the will as part of your estate. Creating a well-drawn will can ensure that the business assets pass to someone who can restart the business after you are gone, if that is what you desire.