Just one third of the population makes a will. Matthew Hansell is a partner and head of private wealth at Mills & Reeve in Birmingham and specialises in will drafting and estate planning for business owners. He explains why it’s time for the other two thirds to consider their bequest
Only a third of the population makes a will and although statistics are not available for business owners I suspect the percentage who have wills is not that much higher. Understandably people do not want to face up to their mortality and there is always the problem of “I have just not got round to it”.
But the consequences of not making a will can be huge. Without one you could leave your family trying to sort out a mess at a time when they are grieving and vulnerable. A will can reduce the stress on your family and ensure you control who receives your wealth and protect it for their benefit.
Once you have made the decision to make a will the next obstacle to face is choosing how best to structure it. Thankfully, if you retain good advisers this is something that can be left to them.
For business owners using a trust structure is usually advisable. Trusts can be likened to a safe in that the trustees have access to the trust funds to use them for the benefit of your family but can then shut the safe door to protect the family funds from others. In particular this can prevent any ex-spouses your children may have getting their hands on your hard earned wealth.
For business owners with shares to leave trusts can also be very effective in inheritance tax planning, allowing you to take advantage of business property relief. Another advantage of this arrangement is that if the company is sold after the business owner’s death then the funds will pass into the trust rather than to his spouse.
This will mean avoiding a 40% bill for inheritance tax on the spouse’s death and allowing access to the funds for the surviving spouse’s benefit in the meantime.
One in three people make a will but three out of three die so perhaps it is time you considered making a will.