Does your company have compliant health and safety measures in place?
Succession planning is very important when you are organising your estate and putting your affairs in order, as it helps you decide how best to move your wealth on to the next generation.
It takes time and it’s important you make the right decisions not only for yourself but for the business itself.
An effective succession plan helps you clarify what will happen, taking into account important issues such as tax implications.
What does succession planning involve?
Succession planning usually involves making a Will and setting out which beneficiary inherits which asset.
The Will protects your assets and estate while also clarifying what you want to happen when beneficiaries are liable for their inheritance.
In addition to this, a Will reduces the risk of disputes because your Will is legally binding and has to be respected by law.
You may also need to place assets in a trust or a Family Investment Company (FIC). An FIC is a company that you and your family have shares in that holds assets and investments in a structure where they can grow over time.
FICs give you control over assets and allow you to manage the wealth accumulated before eventually transferring the company to your children or other younger family members.
Trusts and FICs allow you to protect your wealth and provide security for your beneficiaries when they are able to inherit.
What can succession planning help you do?
An effective succession plan puts your family at the forefront because it helps you manage their expectations and educates them on their responsibilities.
Educating your family helps them understand what is expected of them and what they should expect from your estate. Some may have an additional role like a trustee or an executor, your plan should explain how those roles work.
Your plan should also consider the tax liabilities, namely Inheritance Tax (IHT). Your estate could become liable for an IHT bill if your estate value surpasses the nil-rate band of £325,000.
IHT isn’t easy to manage, but your succession plan should try and reduce the liabilities as best you can. This will also help you decide if you are making a charitable donation as charitable gifts are not affected by IHT.
The plan also allows you to clarify what happens with your business and plan for any unexpected circumstances such as a health diagnosis.
Is support available for succession planning?
If you are organising your estate and want help with succession planning, our expert team is here to support you throughout that process.
We provide tailored advice and support that suits your needs. We will discuss your plans at length, help you write a Will, discuss trusts and FICs and give you the tools to make the right decisions and put an effective succession plan in place that meets your needs.
Ready to put a succession plan in place? Speak with our team of experts.
Related posts
