Business Wills: What They Are, Why You Might Need One, and What Happens If You Don’t

Many business owners assume their company will carry on smoothly if something happens to them.
But unless you have clear instructions in place, that rarely happens.

If you die or lose capacity, your share of the business becomes part of your estate. Your family and executors could suddenly find themselves in charge of something they do not understand, while your business partners wait for probate before they can make any decisions.

That can lead to months of delay, uncertainty and financial strain, often at the worst possible time.

This is where a Business Will becomes important.

What Is a Business Will

A Business Will is a Will or a section within your Will that deals specifically with your business interests. These might include company shares, partnership interests, or sole trader assets.

You cannot have more than one personal Will, but you can have a separate Business Will. It just has to be drafted carefully so that the two documents work together and do not revoke or overlap each other.

Some people include their business interests within their main Will, while others prefer a separate document for business assets. The right approach depends on how your business is structured and who you want to take over responsibility when you are no longer here.

Why It Matters

Without a clear Business Will, your business interests pass under your personal Will or, if you have none, under intestacy rules.

That means:
• Your family, not your business partners, could temporarily control your shares
• The company may not be able to trade or make key decisions until probate is granted
• Your co-owners could face months of disruption while ownership is legally resolved

For businesses that rely on quick decision-making, this can be devastating.

Including Business Interests in a Personal Will

This can work well in some situations, but it is not always suitable.

When it works well:
• You are a sole trader or the only shareholder and director
• Your executors already understand your business
• The business does not need to continue trading straight away after your death

When it causes problems:
• You are part of a limited company or partnership
• Your executors are family members with no business experience
• Your co-owners need to make urgent decisions before probate is granted

When business interests are included in a personal Will, they are legally part of the estate. That means the executors cannot deal with them until probate is issued. Probate can take several months, during which time the business may not be able to transfer ownership, sell shares or make major decisions.

Advantages of a Separate Business Will

• Business continuity - trusted business executors can take control immediately after death or loss of capacity
• Clarity -separates personal and business decisions, avoiding emotional or financial conflict
• Speed - business assets can often be handled separately from the rest of the estate without waiting for probate
• Tax efficiency - helps executors make clear claims for Business Property Relief (BPR) by showing which assets are business-related
• Flexibility - works alongside partnership agreements, shareholder agreements or Cross-Option Agreements

By separating the business element from the personal estate, it becomes much easier for HMRC to identify which assets qualify for Business Property Relief. That can reduce the inheritance tax liability for the estate when the business meets the relief conditions.

Drawbacks to Be Aware Of

• It costs slightly more because two documents need to be carefully drafted
• Both Wills must be kept up to date if the business structure changes
• It can be unnecessary for very small or sole-owned businesses

However, for partnerships and limited companies, the advantages usually outweigh the cost and complexity.

What Happens If You Do Not Have One

If you die without a Will that covers your business interests:
• Your share of the business passes under intestacy rules, often to a spouse or next of kin
• Your business partners may suddenly find themselves in business with someone who has no interest or experience in running the company
• There can be disputes about control, voting rights or sale of shares
• The business could stall or lose value if decisions cannot be made quickly

According to research by International Adviser, around 69 per cent of UK family business owners have no formal succession plan in place - leaving their companies exposed to uncertainty if the unexpected happens.

In Summary

You can include your business interests in your personal Will, or you can have a separate Business Will.
The key is understanding which option best suits your situation.

• A personal Will alone is fine for sole traders
• A separate Business Will works better for partnerships or limited companies

Either way, the goal is the same - to keep your business running and protect the value for your family.

You might need one or both, but knowing which applies to your situation could save your business time, money and stress later.

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