‘If you fail to plan, you plan to fail’. This old adage is rolled out time and again to business owners. The type of planning I’m writing about today is estate planning – making a Will and Powers of Attorney. Before you stop reading thinking this is boring or not relevant, my question to you is: do you love your family, do you value your business and the hard work you’ve put into it? If the answer is yes, read on to see why it’s so important to protect these things now and be comforted to know it’s easier and less expensive than you might have thought.
Statistics continue to show that only about 65% of UK adults have made a Will and only 1% have made Powers of Attorney. The reasons people give for not doing these things include: ‘I’ve got nothing to leave’; ‘it will all go to my family anyway’; ‘nothing’s going to happen to me for a long time, I can do it later’; ‘it’s too expensive’.
If you’re a business owner (or even if you’re not), you might need to challenge all of these assumptions! Let me explain why.
- You think you have nothing to leave. If you have children under 18, they can be taken into Foster Care until Social Services decides who they should live with, unless you have chosen guardians in your Will.
- You think it will all go to your family anyway.
a. If you’re married and you die without a Will, your spouse will receive your personal possessions, £250,000 (including the value of any property you own) and half the remaining value of your estate. The other half will be divided between your children. If you live in a house worth more than £250,000, your spouse may have to pay your children to be able to remain in the property or move out if they have no money available!
b. If you’re not married and you die without a Will, your partner and any step-children have no legal right to anything.
c. If you own a business and die without a Will, the shares might be given to your spouse or children who might not have the knowledge, capacity or willingness to run the business. If you make a Will, you can make sure that the shares pass to the most appropriate person and that your family receive money for the shares (e.g. from your business partner).
- You think it’s OK to leave it to later. Hopefully it is. But you never know what’s going to happen. Sadly, every day, people are involved in accidents that leave them incapacitated or worse. If you are incapacitated and do not have Powers of Attorney in place, your spouse may have access to joint accounts frozen, your business might be put on hold and decisions about your care may be made by the Local Authority. With Powers of Attorney in place, you can make sure that people can act on your behalf during your lifetime if you’re not able to.
- You think it’s too expensive. The cost of making a Will and Powers of Attorney is tiny compared with the cost and heartache caused if you don’t! Do, though, use a professional, qualified adviser to take your instructions and prepare your documents. Online Wills can be made, but the failure rate at the Probate stage is as high as 65%.
‘If you fail to plan, you plan to fail’. Don’t fail your loved ones or your business! Do make a Will and Powers of Attorney.
Emma Marsh is a Director of Cameron James Legal, which specialises in Estate Planning Advice.
E: firstname.lastname@example.org T: 01243 696920