There are significant benefits to putting in place plans for a business in the event of the death of one of the owners and also pitfalls of failing to take professional advice.One of the most important considerations is establishing a Cross Option Agreement. A well-considered Cross Option Agreement protects all parties and ensures:
When a Cross Option Agreement is combined with a By-pass Business Relief Trust for the deceased’s share in the business, it can preserve the Inheritance Tax benefits for future generations.
There are a number of other potential practical threats that are always considered in family succession planning:
Don’t waste the valuable tax-saving opportunities achieved with well drafted agreements and appropriate trusts. And remember – the cost of business wills and agreements is a legitimate business expense.