The process of probate can be complicated in circumstances in which the deceased was the whole or part owner of a business.
As such, when administering the estate of a recently deceased business owner it may be important for the personal representatives of the estate to have the support of a suitably experienced probate lawyer.
Probate and sole traders
Being the personal representative of the estate of a sole trader can be a particularly onerous task.
Unless you have been instructed to do otherwise, the executor or administrator of the estate should seek to take over the running and protection of a business before selling it.
As such, there is much for personal representatives to consider in this situation. For instance:
- the wishes and needs of the beneficiaries
- all the practical and economic concerns inherent in running the business
- financial pressures on the wider estate
- the ongoing viability and valuation of the business
Ideally, the deceased will have factored business succession planning into his or her Will. Not only can this ensure clear instruction regarding the future of the business and its assets, it can also provide peace of mind for those associated with the probate process. However, this is not always the case, particularly in situations where the death of the business owner is unexpected.
Probate and partnerships
If one party to a partnership agreement dies without any form of succession planning in place, the agreement may simply dissolve, giving the surviving partners the ability to buy out the deceased's shares from the representatives of his or her estate. However, this may not always be advantageous from an Inheritance Tax perspective.
Partnership agreements should be carefully thought through to provide clear succession planning and, where possible, to reduce Inheritance Tax liability.
Business Property Relief
Many businesses may be able to reduce their Inheritance Tax burden through the application of Business Property Relief – in some cases by as much as 100%. However, with the introduction of Nil Rate Band Transfers, in cases where the deceased business owner has a surviving spouse or civil partner, it may be advantageous to use this instead.
Help from Oratto today
Coming to terms with the emotional and practical fallout of the death of a loved one is always difficult and can be particularly so when the deceased also left behind a business which needs taking care of
Oratto's experienced probate solicitors can give you the independent advice you need to help you ensure you make the best decisions at this difficult time.
Our Oratto member lawyers have years of experience in this often complex field and are perfectly positioned to help you negotiate the process with confidence. Find the rated and reviewed Oratto specialist who is local to you by browsing through our member profiles. Alternatively, try our Match Service, today.