Corporate Financial Planning

The Death Of A Director Basically Presents Four Problems

The effect of the death or serious disability of a director can create serious difficulties for families and those who rely on the company prosperity. Help is often needed in the following areas:

The problems are the same in the event of disability or retirement of a director, except that there is no Inheritance Tax problem. (The difference between death and disability is that it is illegal to bury you if you are only disabled!)

If your partners wife has called you last night to say he had just had a heart attack and had died, how much of a cheque would you draw for his wife on the next pay day?

How much would you pay her for her interest in the business?

What impact would his death have on your plans to retire?

You might be able to agree all this with his widow, and then again you might not. Would you really want to be in business with your partners widow - and her Solicitors - and her new husband - and his Solicitors?

In order to avoid the obvious problems, it is imperitive to have a written agreement which spells out the details while all parties are able to negotiate from a position of strength.