Everyone should have a Will, yet over half of UK adults haven’t made one, according to the Money & Pensions Service.
For business owners, the conversation becomes far more nuanced. The type of Will you need—and the issues you must address—will depend heavily on your role, your business structure, and your long-term intentions.
Whether you’re a company director, a partner, or a sole trader, your Will isn’t just about personal assets. It’s about protecting the future of your business, your family, and the people who depend on both.
The law in this area is complex, and advice should be sought from a lawyer with particular experience in advising business owners.
- The structure of the business
- Who is involved in running it
- Whether it should be passed on, sold, or wound down
- How inheritance tax applies
This guide explains how business owners can go about making a Will, the issues to consider, and the mistakes to avoid.
Do Business Owners Need a Different Will?
Most standard Wills are not sufficient for the needs and wishes of business owners, and thus special considerations are required.
If you own or control a business, your will must deal with:
- Shares or partnership interests
- Business assets and liabilities
- Decision‑making during probate delays
- Succession and management
- Inheritance tax reliefs such as Business Relief
Without a Will, your shares or business interests could pass under intestacy rules to individuals who may have little interest—or no experience—in running the business. This can create uncertainty, delays, and even conflict at a time when stability is most needed.
Planning for the Future of Your Business
One of the most important questions to ask yourself is: who will take over the business when I’m gone?
If you own a limited company, careful thought must be given to succession planning.
- Who should inherit your shares?
- Should they remain within the family, pass to a co-owner, or even go to a trusted employee?
- How can this be done in a tax-efficient way?
As well as our guide on intestacy rules, we have also covered what happens to a business asset when the owner dies without a Will.
Trusts: Balancing Family Dynamics and Fairness
Business owners often face a tricky balancing act. What happens, for example, if one child is actively involved in the business while another is not? Dividing your estate equally may not always feel fair—or practical.
In such cases, a well-structured Will, potentially incorporating trusts, can help strike the right balance. Trusts offer flexibility, allowing assets (including shares) to be managed in a way that benefits multiple beneficiaries without forcing immediate decisions.
Trusts allow:
- Business interests to be held long-term
- Income to be shared
- Control to pass to appropriate individuals
This approach avoids forcing immediate sales and reduces the likelihood of conflict.
How Business Structure Determines Your Will
How your Will deals with the business depends on how the business is legally structured, not on a “step” you need to complete.
If you are a sole trader
A sole trader business legally ends on death. You cannot leave the business itself to someone else, but your Will can deal with:
- Business assets and goodwill
- Outstanding contracts and liabilities
- Instructions to executors about sale or winding‑up
Without a Will, administrators may be forced to sell assets quickly to meet debts or tax, often at undervalue.
If you are in a partnership
Your partnership interest is governed as much by the partnership agreement as by your Will. In many cases:
- Your interest may pass to surviving partners
- Your estate may be entitled only to a valuation, not control
- Your chosen beneficiaries may never become involved in the business
Your Will must be drafted to work alongside the partnership agreement, otherwise your intentions may not take effect.
If you are a company director or shareholder
If you own shares, your Will should deal explicitly with:
- Who inherits the shares
- Whether other shareholders have rights to buy them
- What happens to control while probate is ongoing
Shareholder agreements, Articles of Association and cross‑option agreements can override a Will, which is why coordinated planning is essential.
The Role of Legal and Financial Documents
Your Will doesn’t exist in isolation. It must align with key business documents such as:
- Articles of Association
- Shareholder agreements
- Partnership agreements
- Cross option agreements
- Life insurance arrangements
These documents can sometimes override the terms of your Will, so it’s essential they are reviewed together. For example, other shareholders may have pre-emption rights to purchase your shares upon death, which could prevent them from passing to your chosen beneficiaries.
Life insurance can play a critical role in business continuity. Policies written in trust can provide funds for surviving shareholders to buy out a deceased owner’s interest, helping to avoid financial strain.
Equally important are shareholder agreements and partnership agreements. These should clearly set out what happens on death, ensuring all parties understand their rights and obligations. Ideally, these agreements should be reviewed at the same time as your Will to ensure consistency. If the agreements are in conflict with your Will, you should seek the agreement of the other shareholders to amend them.
Choosing the Right People to Administer the Will
Appointing suitable executors and trustees is critical. Managing a business after someone’s death requires specific skills—whether that’s continuing operations, negotiating a sale, or maximising value for beneficiaries.
In some cases, it may be sensible to appoint separate executors and trustees for business and personal assets.
You should also consider:
- Business Lasting Powers of Attorney (LPAs) in case of loss of capacity due to an unexpected accident or old age
- A letter of wishes to guide executors and trustees on how the business should be run (for example, supplier relationships, staff bonuses, or branding decisions)
Inheritance Tax Matters: Don’t Leave It Too Late
Inheritance Tax (IHT) planning is a key consideration for business owners. Without proper planning, your estate may need to sell business assets to meet tax liabilities—potentially undermining everything you’ve built.
Business Relief (BR) can be extremely valuable, but it comes with conditions:
- The business must qualify as “wholly or mainly” trading
- Shares must typically be held for at least two years
- Relief may be lost if shares are subject to a binding contract for sale at death
Because BR is so valuable, it’s important not to waste it. For example, leaving business assets outright to a spouse (who benefits from spouse exemption) may seem sensible—but if those assets are later sold, the proceeds could become fully taxable. Furthermore, if BR is abolished after the first death, the surviving spouse will be holding no IHT exempt assets, whereas if the shares are held in trust, the value is kept outside of the survivor’s estate.
Using trusts in Wills can often provide a more flexible and tax-efficient solution, preserving inheritance tax relief while still allowing a surviving spouse and other beneficiaries to benefit.
Preparing for Professional Advice
When meeting with your solicitor, it’s helpful to bring:
- Your shareholder, partnership, or constitutional documents
- A current valuation of the business
- Details of any life insurance policies
- Copies of any existing Lasting Powers of Attorney
Working alongside an experienced solicitor, accountant, and independent financial adviser (IFA) ensures your plan is both legally sound and financially efficient and dovetails with the advice of other professionals.
Final Thoughts
A well-drafted Will is not just a legal document—it’s a strategic tool. For business owners, it provides clarity, protects value, and ensures that your wishes are carried out without unnecessary delay or conflict.
Without one, your business could face uncertainty at a critical moment, your family could encounter avoidable stress, and opportunities for tax efficiency could be lost.
Taking the time to plan now means you stay in control—not just of your business today, but of its future as well.
FAQs
Yes. Business owners typically need a Will that goes beyond standard personal estate planning. A business owner’s Will must account for business assets, shares or partnership interests, succession planning, decision making during probate delays, and inheritance tax considerations such as Business Relief. A standard Will often does not deal with these issues adequately.
Their business interests pass under the intestacy rules. This can result in ownership transferring to individuals with no involvement in, or experience of, running the business. In some cases, the business may need to be sold to settle debts or tax liabilities, potentially at an undervalue.
Yes, but careful planning is required. While a Will can specify who inherits a business or shares, other documents such as shareholder agreements or partnership agreements may restrict who can take ownership. Trusts are often used where only some children are involved in the business, allowing fairness without damaging the business’s ability to operate.
A sole trader business legally ends on death. The business itself cannot continue in the same legal form, but business assets, contracts, and goodwill can be dealt with through the Will. Without a Will, administrators may need to sell assets quickly to pay debts or tax.
Shares normally pass to the beneficiaries named in the Will, but this can be overridden by Articles of Association or shareholder agreements. These documents may give other shareholders the right to buy the shares or restrict who can inherit them, which is why coordinated planning is essential.
In many cases, yes. Partnership agreements often set out what happens on the death of a partner, including whether the interest passes to surviving partners or is bought out. A Will should be drafted to work alongside the partnership agreement, otherwise the intended outcome may not take effect.
Inheritance tax may be payable, but Business Relief can reduce the value of qualifying business assets by up to 100%. Relief is not automatic and depends on the nature of the business, how long it has been owned, and whether there is a binding contract for sale at death. Poor planning can result in relief being lost.
Leaving business assets outright to a spouse may seem sensible, but it can result in Business Relief being wasted, particularly if assets are sold or rules change before the second death. Using trusts in a Will can preserve tax efficiency while still allowing a spouse and family to benefit.
Pre‑emption rights give existing shareholders or partners the right to buy a business interest before it can be transferred to someone else, including on death. These rights are commonly set out in shareholder agreements or Articles of Association and can override the terms of a Will. This means that even if your Will leaves shares to a particular beneficiary, those shares may first have to be offered to co‑owners.
Rosemary Johns | Legal Director
Rosemary is a legal director in the wills, trusts and probate team at Napthens Solicitors, based in the firm's Blackburn office.
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