It is critical for anybody involved in a business to have a Will specifically setting out what should happen to such business interests in the event of death. For a sole trader this is of particular relevance as the Will should set out clear instructions on giving executors power to carry on running the business. The Will can also suggest whether the business is to be continued longer term, wound up or sold. Without such express powers, the executors may not have the authority to carry on running the business which could be detrimental to the estate.
Having an interest in a business can provide inheritance tax planning opportunities but again this is only the case if this is specifically addressed in the Will. It is common to include a discretionary trust of business interests in the Will so as to provide the executors and family an opportunity at the time of the death to distribute the business assets in the most tax efficient manner possible. Without such bespoke Will drafting, a significant opportunity to mitigate an inheritance tax liability can be lost.