Jan Wright, a director within our private client team at Harrison Drury, outlines the key five areas that business owners need to address when doing their retirement planning.
Like most things in life, good retirement planning and making sure you’ve investigated all the options is key to making it successful.
From a legal perspective, much of what I say to people applies equally to owners, managers and staff.
In particular, I work closely alongside our commercial department to provide a rounded service to business owners who want peace of mind that all their personal affairs are in order.
Doing this work well in advance, makes it possible for business owners to get on with planning for and enjoying their retirement.
The advice covers the following five areas:
Make a will to ensure your estate benefits the people important to you, rather than risking uncertainty and possible litigation over your estate after your death. Dealing with this in advance also allows you to consider tax planning to protect your assets.
Lasting Power of Attorney
Have LPAs in place for your property and affairs and your health and welfare to allow attorneys of your choice to assist if you lose mental capacity. Failure to do so will leave you open to the more expensive Court of Protection application to appoint a deputy.
Business LPAs and company articles review
If you have not thought about what effect losing mental capacity would have on your business, it needs to be addressed. Would the company survive the loss? Making a business LPA to provide for this eventuality, or amending the company structure, could ensure this is not an issue. Larger companies are likely to provide for termination of an incapacitated director in the articles of association, but smaller private companies would need someone to continue running the company and a business LPA would be appropriate. Similarly, business LPAs would be appropriate for sole traders and partnerships.
Professional financial advice
You need to understand the implications of the new pension legislation before you decide when to take your pension and get advice on planning for your future care. Care funding is an area that’s particularly overlooked.
It sounds like an incredibly long amount of time, but a plan to leave your business should be considered from 15 years prior to retirement. Ideally, this would be in the form of a written plan containing key goals, contingency plans and a phased timetable for your exit.
Dealing effectively with the above will make the lives of those around you easier and helps avoid a future crisis. Our team at Harrison Drury can advise on any of the issues mentioned above.
For more information on retirement planning for business owners, please contact Jan Wright on 01772 258321.