Business Owners And Wills: How To Protect Your Money And Estate From Litigation

| April 6, 2016 | 0 Comments

Businesses of any shape or size will have assets that need organizing after the owners passing. These assets include money, equipment and property, and they’re very delicate situations to handle. As such, it can be difficult for company leaders to protect their estates from litigation, as there’s so much to take into consideration.

When writing a will, you have to be incredibly thorough. Including everyone, continuing your company and detailing what will happen to each asset is key. So, during the will writing process and beyond, how can business owners protect their companies from litigation? You have a lot of things to think about, so before you put pen to paper, have a read of the following advice.

writing

Writing a will isn’t easy…

 

How to avoid giving someone grounds to contest your will

Of course, you probably won’t be able to cover every avenue. People with large families often find that they can’t please everyone with the decisions they make in their will. So, all you can do is explicitly state what you want to happen to each part of your estate, without fail.

Firstly, it’s important to be heavily charitable toward your immediate family. This is the group of people who have been with you your whole life, and will look after your estate with the most care. Making specific gifts to certain people is ok – just be sure not to lean too favourably in one direction.

A lot of people divide up their estate equally between their close family members. For example, half to their partner and a quarter to each of their two children. Not everyone has this exact amount of children though, but it’s still possible to divide by the amount of children you do have.

Most people will contest a will if they feel they have been unfairly treated. This could be not receiving something they felt entitled to, not receiving enough, or receiving nothing. So, before you even start to draw up your will, you should be having these conversations. Ask people what they expect, and tell them what you plan to do. The loss of a family member will be enough to cope with without a possible legal battle to boot.

So, in general, remember those closest to you. Thoroughly scrutinise your assets and divide them up accordingly. Make it clear who will receive what, and talk to these people while you’re still alive. Anything you don’t mention in your will could be controlled by government authorities, so put your family first.

If you don’t, your estate may be subject to litigation after your death. This can be a strenuous time for your family, both financially as well as mentally, and is difficult to overcome. You can find out about estate litigation here, and if you’re a business owner, it’s vital you brush up on it. You never know if you’ve given someone grounds to contest your will or not, and it’s possible you’ve done so inadvertently.

family

Keep your family together by including everyone equally

Important things to consider when writing your will

If your business is profitable, it may be worth a lot. This worth and value covers every inch of your estate and all its assets, from office equipment to money in the bank. So, to begin with, you should write up a list of all the assets you own to get a rough idea of the value of your company. These assets include, but are not limited to:

  • Your house and any other property you own
  • Vehicles; cars, vans, bikes etc.
  • Any and all monies you have stored in the bank at the time of passing
  • Personal belongings; jewellery, paintings, technology
  • Furniture and appliances; desks, chairs, computers, sofas etc.
  • Pension funds
  • Investments and shares

If possible, total all these things up and come up with a rough figure. Of course, some things (like the money in your bank) you won’t know until you pass, so make an estimate. Once you’ve done this, you should be asking yourself a number of questions to determine how best to spread your estate.

Will your business still be operational after your passing?

If the answer is no, then you should make this clear in your will. That way, your family members can sell on your company or liquidate your shares in it. If you don’t make it clear, your family could contest ownership of the business if it falls under the laws of intestacy.

Anything and everything you don’t make clear in your will can be seized by the government, so be thorough.

audi-car

Everything, including cars, counts as an asset

Are you leaving behind any debt?

Again, you have to very careful not to incite jealousy or anger with your decision. Generally speaking, your close family won’t inherit your debt, but this isn’t always the case. Many life insurance policies can be used after a person passes, to pay off their debt. This means that anyone mentioned in the will can inherit any assets without inheriting the debt with them.

Of course, if you neglected life insurance, of you aren’t covered for debt, then you could pass this on to your family. This could lead them to dispute your will if they feel like that’s unfair. In most cases, it most definitely is unfair, so try to pay off your debts before your passing.

Don’t forget your business partner

If you went into business with a partner, then you may find the will writing process a lot easier. Because you have a second person to assume control, you can pass all your assets onto them with little fuss. This instantly resolves any and all conflicts that may arise in regards to the ownership of the business. It will automatically pass on to your business partner, so there is less chance of your will being contested.

This in mind, it would still be a good idea to state exactly what you want your business partner to receive. Let’s say that you don’t, and your family instead inherits some assets relating to your company. Your partner could then contest them, so make everything clear when you write the document. In short, factoring in your partner is the easiest way to organize your estate after your death.

Have you written a will that includes all your assets? Have you noticed any particular aspects that could cause a dispute? Share your story in the comments!

Category: Investment

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