Business succession and continuity planning

Last verified: 22 December 2025 (England & Wales)

You have built something valuable. A business with customers, staff, suppliers, contracts, and cashflow. But if you died tomorrow, or you were suddenly unable to make decisions, would the business keep moving, or would it stall while everyone works out who is allowed to act?Key idea: a Will deals with what happens on death. A tailored LPA covers incapacity during lifetime. Your company documents often control what happens to shares and who can run the business day-to-day.

Quick-read summary

If you die or lose capacity without a plan, bank access can freeze, contracts can stall, and value can drop quickly.
Your company documents (Articles of Association and any shareholders’ agreement) can override what a Will tries to do with shares.
A well-drafted Will with business clauses sets out who benefits and who is trusted to handle the business interest on death.
A Business LPA can keep decisions moving during incapacity, especially where banking mandates and signatory rules matter.
In many cases, two LPAs are cleaner: one for personal finances and one business-focused, with dedicated attorneys for the business side.
Regulated or restricted professions may limit who can run the firm, even if a family member inherits value.
Practical aim: keep the business running, protect value, and reduce the risk of internal deadlock.

Why this matters

When an owner dies or loses capacity, three groups feel it immediately: family (income and inheritance), staff (wages and direction), and customers and suppliers (service and continuity). The problem is rarely lack of goodwill. It is lack of legal authority.Wills are not only for later life. People can die unexpectedly at any age through sudden illness or accident. Most of us can think of someone who died well before their time, and I am sure that was not part of their plan.Incapacity is also wider than dementia or old age. It can be temporary or situational: serious illness, a long recovery, an accident, or anything that stops you meaningfully attending meetings and running the business day-to-day.

Most owners insure the assets they can see. The bigger risk is authority freezing when life happens.

The core tools

1) Your Will

Your Will can deal with business interests, but it needs to do so deliberately. That usually means:

identifying what you own (shares, partnership interest, goodwill, business assets)
choosing executors who can take sensible advice quickly
coordinating with company rules (Articles, shareholders’ agreement, partnership agreement)
setting out how value should reach your family (directly, or via a trust)

Important note for regulated or restricted businesses: you cannot assume a spouse or child can step in to run the practice, even if they inherit the value. The business may need to be managed or sold by someone properly authorised or qualified, in line with the governing documents.

2) Your company documents

For limited companies, the Articles of Association and any shareholders’ agreement often set:

who can own shares
what happens on a shareholder’s death
whether co-owners have first refusal (pre-emption rights)
how directors are appointed or removed

A common trap is a Will that leaves shares to family, while the Articles restrict transfers or give co-owners first refusal. The result is delay and conflict.

3) A Business LPA

There is no special government form called a Business LPA. It is still a Property and Financial Affairs LPA, tailored in scope (sometimes called a commercial LPA).In many cases, the cleanest approach is two Property and Financial Affairs LPAs:

a personal LPA for day-to-day family finances, and
a business-focused LPA for business matters

This often allows you to appoint dedicated attorneys for the business side, without forcing the same people to handle everything.

In regulated or specialist businesses, the person who is perfect for your personal finances may not be eligible, authorised, or equipped to deal with business decisions. That is one reason two LPAs are often cleaner. Professional capability matters. Choose people who can liaise calmly with your advisers and stakeholders (for example your accountant or bookkeeper, lenders, and key suppliers) and keep decisions moving.

Succession confusion destroys value fast. A Will plus well-structured LPAs is one of the simplest ways to reduce that risk.

4) A Letter of Wishes (supports your Will and LPAs)

A Letter of Wishes is a private companion document kept with your Will, any trust, and your LPAs. It is not legally binding, but it gives the people acting for you the context behind your decisions and the practical detail that does not belong in the legal documents.

For business owners, it can be especially helpful because it can explain, in plain English:

what “continuity” looks like for you (keep running, stabilise then sell, or sell quickly at a fair price)
who you would like your executors, trustees, or attorneys to consult (for example your accountant, bookkeeper, IFA if involved, key managers)
any sensitivities in a family business, and how you would like discretion used if relationships are strained
what matters most to you (protect jobs, protect customers, protect family income, preserve legacy)

Used well, it keeps the Will and LPAs cleaner and reduces the need for frequent rewrites, while still giving your decision-makers the clarity they need.

Further reading: Letter of Wishes — Wills, Trusts & LPAs

5) A General Power of Attorney (short-term tool)

A General (Ordinary) Power of Attorney can be useful as a stop-gap when you still have full capacity, but need someone to act for you temporarily. It is not a substitute for an LPA because it ends if you lose capacity.

If you want the detail on when it is useful, see: What are the five types of Power of Attorney?

6) A Business Trust (by Will)

A trust in the Will can be useful where:

you want beneficiaries to receive value, but not immediate control
you want trustees to manage timing, disputes, or a sale
you want to protect vulnerable beneficiaries, or manage family dynamics
you want the business handled sensibly while beneficiaries are supported

This is not one size fits all. It depends on the business, the people involved, and what the governing documents allow.

Who does what?

This is where many plans quietly fail, because people assume roles overlap.

Executors (Will): deal with the estate after death. They do not automatically become directors.
Directors (company): run the company day-to-day. Appointment is controlled by company rules.
Attorneys (LPA): act under the LPA within its scope.
Attorneys (General Power of Attorney): can act only while you have capacity, and only within the authority you grant.
Trustees (trust): manage trust assets for beneficiaries under the trust terms.
Co-owners and shareholders: may have rights that control transfers or appointments.

One person can wear more than one hat, but the hats are different.

Practical checklist

Consider reviewing your position now if any of these are true:

you are a director-shareholder, partner, or sole trader with staff or meaningful contracts
your business provides a big part of your family’s income or future security
you have never checked your Will against the Articles or shareholders’ agreement
the right person for personal finances is not the right person for business decisions
your banking mandate relies heavily on you personally (signatures, approvals, online access)
a dispute between owners would make key decisions hard to agree
you would want a clear plan if you were out of action for weeks or months, even temporarily, not just if you died

What to consider

Continuity vs control: do you want the family to inherit control, inherit value, or both?
Right people: who is actually capable, trusted, and available to act quickly?
Alignment: do the Will, Articles, shareholders’ agreement, and any partnership agreement all point the same way?
Exit plan: is the best outcome a family-run continuation, or a planned sale at full value?
Family fairness: do you have children who are not involved in the business, and how will you balance that?
Banking and contracts: will banks and counterparties recognise the authority you plan to use in practice?
Tax position: Business Relief can be valuable, but it is conditional and subject to change.
Personal vs business: keep business decision-making with business-capable people, not automatically with family.

Decision deadlock and disputes
In owner-managed and family-run businesses, disputes can become a continuity risk in their own right. Plans that rely on everyone “getting on” can fail under stress. A good structure anticipates disagreement, keeps authority clear, and reduces the chance that a personal fallout turns into a business crisis.

Regulated or restricted professions
If the business is regulated, eligibility and authorisation can matter as much as trust and competence. It is worth checking early so the plan is workable in practice.

Cases

The owner who did everything except the legal bits
A small engineering firm had 12 staff and strong demand, but only one person could approve payments and sign off key contracts. After a sudden hospital admission, payroll became a weekly worry and a key supplier switched to pro forma. The business survived, but value was lost through stress, delay and rushed decisions. With a business-focused LPA and a clear signing structure, the firm could have kept running smoothly while the family dealt with the bigger crisis.

The Will that tried to gift shares, but the Articles disagreed
Two co-owners ran a successful local services business with a 50:50 share split. One owner’s Will left their shares to their spouse. The company documents, however, gave the surviving owner first option to acquire the shares, with a valuation mechanism. The family assumed they had inherited control. The surviving owner assumed they would buy the shares. The delay damaged trust and distracted everyone from customers.

In a similar situation, the client took advice early and aligned the Will with the company rules. We also made an introduction to a trusted financial adviser, who arranged life cover designed to fund the share transfer on death. The surviving owner could exercise the first option under the documents without crippling cashflow. The family inherited the value of the shareholding, and the business continued under the surviving owner rather than drifting into a distressed sale.

The spouse who inherited value, but could not run the practice
A specialist professional practice was the main family asset. The owner wanted the spouse to be secure, but the spouse did not have the appetite or background to run the firm, and parts of the work required the right authorisation and competence. The plan focused on value first, not control. With the right Will clauses and an agreed route for management or sale, the family received financial security without forcing the wrong person into the wrong role.

The partnership with no clear authority on incapacity
Two partners assumed the other could “just carry on” if one became unwell. When one partner could not engage for several months, the bank wanted clear authority for certain instructions and a mandate change. Trading slowed and relationships frayed. A documented plan, aligned with the partnership agreement and a business-focused LPA, would have protected continuity and reduced pressure on the well partner.

The family fallout that risked a deadlock

A family business had three equal owners: a father, his brother, and the father’s adult son. Relationships deteriorated to the point where the son refused any face-to-face discussion, and the business started to suffer because key decisions were being delayed.In one similar situation, we used a short-term emergency measure while the son still had full capacity: a General (Ordinary) Power of Attorney. This authorised a suitably experienced professional (the business’s accountant) to represent the son’s interests in business discussions, attend meetings, and help progress agreed decisions without forcing destructive direct contact. It kept the business moving while a longer-term solution was put in place. A General Power of Attorney is not a substitute for a Business LPA (it ends if capacity is lost), but it can be a very effective stop-gap in the right circumstances.
Further reading: What are the five types of Power of Attorney?

The planned continuity and full-value exit
A consultancy owner reviewed their Will against the company documents, put a business-focused LPA in place, and clarified who could act with the bank if they were suddenly out of action. When incapacity later happened unexpectedly, decisions continued without panic. On death, the business sold in an orderly way at full value, and the family received security without a fire-sale discount.

FAQs

Do I need a separate Will for my business?
In most cases, no. You usually have one Will and it includes the right clauses for your business interest. The main exception is where you have assets in other countries, where separate Wills (one per jurisdiction) can sometimes make administration easier, but they must be coordinated carefully.

If my Will conflicts with the Articles or a shareholders’ agreement, which prevails?
In practice, company rules often control share transfers and director appointments. A Will that ignores those rules can cause delay and disputes. The aim is alignment, not conflict.

What is a Business LPA?
It is a Property and Financial Affairs LPA tailored so it covers business decisions (sometimes called a commercial LPA). In many cases it is cleaner to have a business-focused LPA alongside a separate personal finances LPA, drafted so the scopes do not clash.

Is there a short-term option if I need someone to act while I still have capacity?
Yes. A General (Ordinary) Power of Attorney can be a useful temporary tool when you still have capacity but need help quickly. It ends if you lose capacity, so it is not a replacement for an LPA. More detail here: What are the five types of Power of Attorney?

I already have a Property and Financial Affairs LPA. Can I add a Business LPA now?
Yes. Many people set up personal LPAs first, then add a business-focused LPA later once they realise their business needs its own continuity plan. The key is drafting so the documents do not clash in scope. In many cases, the cleanest solution is to refresh both LPAs so one is clearly personal and the other is clearly business-focused. If an existing LPA needs cancelling, that is done separately via a deed of revocation with the Office of the Public Guardian (OPG), and we are very happy to help with that.

Do executors automatically become directors?
No. Executors deal with the estate. Director appointment is controlled by company rules. This is one of the biggest areas of misunderstanding.

Can a bank freeze or restrict access if someone loses capacity?
It can happen, depending on the account mandate and who is authorised to give instructions. The practical risk is delays or restrictions until the bank can rely on valid authority. That is one reason a business-focused LPA and a sensible signing structure are worth reviewing early.

Can business assets reduce inheritance tax?
Sometimes. Business Relief can apply to qualifying business assets, but conditions and exclusions apply and rules can change. It is sensible to take advice alongside your wider planning.

Do I need my Will to plan for Business Relief?
Usually, no. Business Relief is normally assessed and claimed by the executors (with the estate’s advisers) when valuing the estate. Because eligibility depends on the circumstances at the time, it is better not to rely on assumptions in the Will. When we help you plan your Will and business continuity with Fern Wills & LPAs, we will usually suggest a quick sense-check with your accountant and financial adviser. If you do not already have advisers in place, we can make an introduction to an appropriate professional so the legal plan and the financial planning stay aligned.

I am doing this mainly for business continuity. Can my business claim it as an expense?
Possibly, but it depends on your structure and what the work actually covers. Many Wills and LPAs are treated as personal costs even where they support business continuity. Ask your accountant before relying on treatment either way, and where there is genuine business-only continuity work, it can help to keep it clearly separated from personal estate planning.

Optional technical notes

Business Relief reduces the value of qualifying business assets for inheritance tax purposes and can apply at 50% or 100% depending on the asset type. Current HMRC guidance:
Business Relief (overview): business-relief-inheritance-tax

What qualifies: what-qualifies-for-business-relief

Reforms have been announced that are due to take effect from 6 April 2026. (This is a planning point to review, not something to guess at.)
changes-to-agricultural-property-relief-and-business-property-relief

For LPAs, registration takes time and you cannot rely on “doing it later” after a health event. Early planning is the safe option.

Next steps

Gather your key documents: latest Will, Articles of Association, shareholders’ agreement (if any), partnership agreement (if relevant), and business banking mandate arrangements.
If you already have LPAs, bring them too. We can advise whether adding a business-focused LPA or refreshing both is the cleanest route.
Book a short review so we can identify gaps, confirm how your company rules interact with your Will, and map a straightforward plan. Where appropriate, we will also suggest a quick sense-check with your accountant and financial adviser, or make introductions if you do not have advisers in place.

Closing summary

You have worked hard to build a business that supports your family, your staff, and your customers. That brings responsibility as well as pride. Continuity and succession are business-critical risks: who can act, who can decide, and how value is protected if you die or cannot engage day-to-day. One of the most effective ways to reduce that risk is a joined-up estate plan: a Will that aligns with your company documents, and properly structured LPAs so authority does not freeze when life happens. If you have not reviewed this recently, this is a sensible place to start.