Retirement planning for business owners

Like most things in life, good planning and making sure you’ve investigated all the options is key to successfully retiring.

By Eve Carter, director, Harrison Drury

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:

Wills

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 / 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.

Take 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.

Succession planning

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 help avoid a future crisis. Our team at Harrison Drury can advise on any of the issues mentioned above.