Founder-led businesses such as care homes are being urged to start succession planning early, as waiting too long could prove costly.
Michelle Seddon, a partner in the private client team at national law firm Clarke Willmott, warns that failing to prepare could mean owners lose control over future ownership and decision-making.
“Leaving succession planning too late can force families into rushed decisions, increase tax exposure and create uncertainty for staff, residents and the regulator,” says Michelle Seddon.
“Starting these conversations early gives families time to consider their options and put appropriate arrangements in place, rather than having to make important decisions under pressure.
“For many care home owners, the business represents much more than a commercial asset. It can be the result of decades of hard work and form a significant part of the family’s wealth.”
While some care home owners have always envisaged passing the business to the next generation, the reality is often more complex, says Michelle Seddon.
“Owners need to consider their retirement plans – whether the next generation wants to take on the business; how ownership can be divided fairly; and what should happen if they become unable to make decisions themselves.”
Michelle Seddon says that succession planning is often viewed as a corporate exercise, but for many owner managed care businesses it begins with personal and family considerations.
Questions commonly include:
- how retirement should be approached
- whether the business should remain within the family
- how future inheritance can be managed fairly
- what arrangements should be in place if an owner loses capacity
- how personal and business assets can be protected for future generations
For care home owners, these decisions also need to be considered alongside personal planning, including Wills, Lasting Powers of Attorney and estate planning arrangements.
“There is rarely a one-size-fits-all approach. Every family and every business is different, and the right solution will depend on the owner’s personal and commercial objectives,” says Michelle Seddon.
“Planning for succession does not mean stepping away from the business tomorrow. It means making sure the right foundations are in place for whenever that transition eventually takes place.”
Michelle Seddon is a partner in Clarke Willmott’s private client team, with expertise in Wills, Trusts, Powers of Attorney, estate administration and Death in Service advice to trustees.
Clarke Willmott is a national law firm with offices in Birmingham, Bristol, Cardiff, London, Manchester, Southampton and Taunton.
