Do you find the idea of having difficult conversations with other family members about the succession plan for your business too daunting?
The good news is that there are steps you can take now that may not require major decisions to be made just yet but could have a positive impact on resolving these issues in the future.
Under the Powers of Attorney and Agency Act 1984 you can appoint another person to act on your behalf during your lifetime if you become legally incapacitated at any stage.
We never know when trouble will strike, so having in place the legal structure to enable the business to continue in the event that you are unable to make your own decisions is critically important. The world keeps moving, even if you are not able to.
If you feel uncomfortable about giving someone this significant power, speak to a legal adviser about building in protections for how the power is used.
It is always preferable to ensure your will is exactly how you would want it, should you die. This is why lawyers recommend regularly reviewing your will because your circumstances and your wishes often change through the years.
Even if you are not ready to make some of the hard (and perhaps final) specific decisions about how your business and estate will be divided, at the very least you should ensure that your existing will does not create a disaster.
There are ways to build some flexibility into your will while maintaining your broad intentions, which may lead to a better result than an existing will that divides your estate unfairly.
One of the first steps lawyers take when advising on a business succession plan is to work with accountants and financial advisers to ensure the business structure can deliver what the client wishes it to achieve.
Having a large degree of flexibility within the structure ensures the business can evolve and change through the years and enables a smooth and tax-effective transfer of assets to the next generation when the time comes.
You can create a flexible business structure now without having to necessarily make final decisions about where the assets will eventually end up. It is a process that would need to happen in any event, and will make taking the next step of deciding 'who gets what' much easier.
We encourage all of our clients to get their affairs in order and to communicate clearly with their family to ensure that, when their time comes, the family does not descend into a dispute about money.
At the same time, we recognise the process is not always easy, so a step-by-step approach is likely to benefit those who are not yet ready to face those hard decisions.
This article was written by Joe Anderson and was first published in The Stock Journal on Thursday 9 November 2017.