The entrepreneur’s Last Will and Testament
Unexpected and sudden changes causes often damage to the business. It is difficult to be prepared to surprising situations, but often planning decreases damages which are caused by changes and helps to survive from difficult situations. Entrepreneur’s death could cause problems to a company if death comes sudden and there has been no time to get prepared for it. In the worst case entrepreneur’s death destroys the whole business if the business goes to heirs who are unable to run it.
Why Last Will?
The entrepreneur can prepare himself to his own death by making a Last Will. According to the Inheritance Code the will is the only way to dispose one’s property after death and it should fill strict requirements in form to be valid. If there is no Last Will, the statutory succession follows the provisions of Inheritance Code.
When pondering whether to make a will or not, the entrepreneur should consider what he wishes to happen with his business after his death. If the entrepreneur wants his business continuing also after his death, it shall be recommendable to bequeath the business to somebody who has the ability and interest to continue running it. Alternative option could be a provision in the Last Will to turn all the company’s assets to money and to execute the Last Will after liquidation of the property is done.
Limitations in provisions of a Last Will
It is, however, not possible to dispose freely of your property in the Last Will. The Inheritance Code guarantees statutory portion for direct heirs if they demand it. Also marriage can have an influence on the way how the testator can dispose of his assets. Basically, when marriage is over, the property will be divided into two equal parts between spouses, if there is no prenuptial agreement. With a few exceptions, the heirs or spouse do not have a right to object-specific demands concerning the property. From the point of view of the Inheritance Code, if there is enough other property, it is possible to dispose of business assets freely.
Bequeathing business property might require some changes in business structure even when the entrepreneur is still alive. The entrepreneur should make beforehand sure that it is possible to divide his property the way he wishes. In some cases for example, the business structure might need changes in order to compile the Last Will without violating the compulsory portions. When business structure is in order, it is possible to guarantee income from the company to spouse and children, although they do not participate actively in managing the company.
It’s recommendable to use an expert when drawing up the Last Will in order to make sure the wishes of the entrepreneur will come true as well in order to avoid beforehand all the pitfalls in the execution process. The Last Will should always be made with careful consideration, but you should not postpone making it. It is always possible to change the Will with a new Will if the former one is not up to date anymore and does not reflect the last will of the testator.