A normal will as most people know them is fairly straight forward. A business will is no different.
You may have heard of them as a buy/sell agreement, and the best way to describe them is by using a simple example:
Tom and Terry are partners in a very successful accounting business. They both own 50 percent of the business. At age 45 Tom dies suddenly. Sadly they have no business will.
Upon Tom's death, his 50 per cent share of the business is left to his wife Sally. She has no expertise in accounting and has never shown any interest in working in the firm. Here lies a huge problem for all surviving parties.
Terry has a business partner with no idea about accounting. Potentially, Sally could sit back and legally continue to take the profits. She has every right to sell her half of the business and not necessarily to Terry. As a 50 per cent share holder, she has the power to make all sorts of changes and disruptions and be legally entitled to do so.
A business will would have solved all these potential issues. Funded by Life Insurance, a business will would have seen Sally receive a lump sum equivalent to the value of the her share of the business through the death of Tom.
In consideration for this, Terry would receive the 50% share of the business. He now has 100% ownership of the business and can fund a new partner into the business.
Think about the value of your business.
A business will can solve a huge problem in a very cost-effective manner. Generally, business owners spend all their time working out how to grow the business, how to build client relationships and develop markets and opportunities for the business. All these are very important, however we must prepare our business for the unexpected. This area is an important consideration for all business.
For further information: contact PJT on 07 5413 9300, or by email.