Will power: part one

Where there’s a Will, there’s a way for a business to make a seamless transition following a death, as Adam Bernstein explains

By Adam Bernstein | Published:  11 July, 2019

Not all business owners have the foresight of the late Richard Cousins, the chief executive of Compass Group who, along with his family, was sadly killed at the end of December 2017 when a pleasure aircraft he was travelling in while on holiday crashed. Cousins’ generosity led to the charity Oxfam being given £41m in a bequest because of a ‘common tragedy clause’ that he had inserted into his Will.
    
Some 60% of the UK population does not have a Will, including a third of those aged over 55. For a business owner, dying without making a Will and/or planning your succession can have a devastating effect, not only on your family but on your business too as having nothing in place can lead to an interregnum in your affairs.
    
Angharad Lynn, a solicitor in the Private Client team at law firm VWV, says that if you die without a Will your estate will be passed on according to the intestacy rules which changed in October 2014 when the Inheritance and Trustees Powers Act came into force. “Under the new rules,” says Angharad, “if an individual dies leaving a spouse and children, the spouse will take the statutory legacy (currently £250,000) and the rest of the estate will be divided equally between the spouse and the children. If there are no children, the spouse inherits the whole estate.”
    
She warns that for unmarried couples it is particularly important to have a Will as the intestacy rules take no account of such relationships: “If the couple have children, they will inherit everything. If not, the estate will go to other blood relatives. The surviving unmarried partner will receive nothing.”

Choosing an executor
It’s an executor who administers estates after death. There is no limit on the number you can name in your Will. However, the maximum number of people who can take the grant of probate is four.
    
Angharad says it’s quite normal to appoint a spouse or children as executors but suggests that it is also worth appointing a professional who can ensure that business assets are dealt with as you would wish. This can be an individual, such as your solicitor or accountant; alternatively, many professional firms have a trustee company that can act as an executor. She adds that the advantage of this is that while your own lawyer or accountant may have retired (or died) by the time of your death, the trustee company will provide continuity for the appointment of executors, enabling partners from the firm to act. The retirement of your own lawyer will not mean that you need to update your Will.

Assets that can be left by Will
In your planning it’s important to not forget a spouse as assets held jointly can be owned in either of two ways. Angharad says that they can be owned as joint tenants or tenants in common – and this is true for all assets, from your family home to shares in your business: “In essence, if an asset is owned as a joint tenancy, it will pass outside your Will, by the law of survivorship. What this means is that if the shares in your business are held with your spouse as a joint tenancy, they will pass automatically to them on your death and not by your Will, regardless of the provisions of the Will.”

Plan to save on inheritance tax
Tax planning after death must be a consideration and Angharad notes that one of the reliefs from inheritance tax is Business Property Relief (BPR) which is available for a business or an interest in a business, as well as land, buildings, plant and machinery used for the purpose of the business and shares in unquoted trading companies. “BPR is currently awarded at 50% or 100%,” says Angharad, “it’s a very generous relief and it is possible that its use will be curtailed in a future budget. So, when planning your succession, ensure your business will qualify for BPR by checking it meets the scheme requirements.” To qualify businesses must be trading, and if the proportion of assets held in investments is too high the business may not be able to use BPR.
    
The charity Will-Aid runs a scheme each November where simple Wills can be written for a charitable donation. Go to: www.willaid.org.uk

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    Inspirational
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    Elisa Bramall from Scantec Automotive from Hailsham, East Sussex said: "I have attended several training courses with Andy. I only have good things to say about him of course. His passion being the main thing, and that he says it how it is. No beating around the bush. A lot of his values we stand by as well, i.e use of OE parts, tools and genuine equipment. When you attend his training courses, it aligns with what we want to achieve. With all of his experience, if you think you know it all you certainly don't."
        
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    Brothers Mahesh Vekaria and Pravin Patel own a garage each in Harrow. Mahesh, owner of Cardoc said: "What have I learned from Andy today so far? It has refocused and re-energised my enthusiasm for marketing. We do a fair bit of marketing, but coming today, you see a different angle to it."
        
    Pravin, proprietor at Harrow Service Centre, observed: "Today has been interesting. I have learned a lot. In a sense we already do a bit of marketing, but to understand what it really does mean and the ways we are doing it – is it right or wrong? – is really useful. It is something to implement when we go back to work."
        
    In that the pair are brothers and are based just half a mile apart, Aftermarket was curious as to who would get back and implement new marketing initiatives first. "I would say that I would," said Mahesh. Pravin agreed: "Yes  he would, definitely, having said that, he looks after my marketing for my garage as well. So he has double the work really."

    Information
    Edward Cockhill of Uckfield Motor Services in Uckfield East Sussex observed: "It is quite an eye-opener. I saw marketing as just advertising, whereas it is really the whole perception of my company. There is a lot of cogs that are going to be turning when I get home. "
        
    Peter Bedford of GT One Ltd in Chertsey, Surrey said: "We are an independent Porsche specialist. Our business is in need of a bit of a review in its marketing ideas, and we are looking to freshen it up. I have come along to see another angle of it. Some things I think I know and we have applied. Some I know and we have not applied, so you need a kick up the backside. Some things are brand new. On the whole it is brilliant."
        
    Cieran Larkin from Larkin Automotive in Dublin commented: "It is good to get marketing training from a professional who has been in the garage business as opposed to someone who is dealing with generic marketing. Andy's experience is brilliant in that way."
        
    Nick Robinson from Marchwoods in Folkestone had been to Andy's courses previously and was back for more: "I came to Andy's events last year for garage financial understanding and customer excellence. They were real eye-openers so I have come back for another one. I was badgering him earlier to see what is coming up next. I will be at that one as well!"
        
    Meanwhile, for Edward from Swanley Garage in Swanley, it was his first time: "This is the first one I have been to. It is really good. It is about getting all the information and having the guts to go out and do it. We are all guilty of not doing marketing properly, it is about taking that jump to rebrand yourself or say right we are not doing that any more, or we are not doing cut price work, or we are not going to let the customers bargain with us any more, and seeing where it takes you."

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