Most owner-managers have a pretty good idea of their net worth. As the years go by, they keep an eye on the increasing values of their assets and the annual accounts show them how much their business is worth.

These days, it’s not unusual for this net figure to be quite substantial. With property price escalation, particularly residential property, lots of small business operators with paid-up mortgages find themselves to be paper millionaires.

Those who have taken the decision to buy their business premises at some point have probably done fairly well, too. Then there are the overseas holiday homes and apartments –  perhaps a refurbished buy-to-let house and a few investments along the way to add into the equation – not to mention the value of the business itself.

As the years and decades go by, this collection of assets can provide a handsome income, an enjoyable lifestyle and advancement opportunities for their families.

The majority of small business people would say that this has been the whole purpose of their work. They didn’t embark on entrepreneurship to become hugely wealthy, they just happen to have been fortunate enough to do well through application and hard work.

They’ve paid their taxes, accumulated a little wealth and provided for their families and retirement.

Maximising net worth

Getting professional advice about the eventual disposal of these hard-won assets can spare untold loss, trouble and conflict in the aftermath of a well-spent career in a small business.

Seeing a qualified and reputable advisory firm about mitigating the worst effects of inheritance tax, IHT (or ‘death duties’, as they used to be described) is essential.

Taking early steps to make sure as much of your accumulated worth can be passed to your descendents, or others of your choice, really can make a huge difference to your eventual legacy. My advice is not to leave it until it’s too late to decide who is to benefit. Attend to it while you’re fit, strong and in full command of your mental faculties.

Above all, make your will.

Set out your objectives

Taking these actions will confirm that you’re as shrewd and prudent in business matters as ever and provide those around you with clarity about your objectives.

Before you start to write your will, you need to make some important considerations.

Do you want to provide for the wellbeing of your spouse as a first priority in her or his surviving years? Or are your children and grandchildren a more pressing concern?

Will you be making provision for each of your children equally or will there be shifts of emphasis depending on their character and circumstances?

Are your grandchildren deserving of an equal share, or do some stand to benefit more because of their differing needs and circumstances?

“If you don’t make your intentions clear in a legally recognised and signed will, your feelings and wishes will count for nothing”

If you don’t make your intentions clear, in a legally recognised and signed will, either your probate executors or the courts will stick to the rigid formula laid down by law and carve up your wealth accordingly.

Your feelings and wishes will count for nothing. Ex-marital partners, ex-cohabitees, stepchildren and distant relations with whom you may have lost touch could all decide to pop out of the woodwork and join the queue as your wealth is redistributed.

What are your options?

You may choose to bequeath shares or a ‘commercial’ reward to those who have loyally supported your business over the years to ensure its survival. This could be by redirecting assets to co-directors, long-serving employees or minority shareholders. They could end up owning and running your business.

Others have very different ideas. They really would prefer to sell the business and know that the product of their lifetimes’ efforts will be directed toward providing funding for a charity close to their heart or possibly a religious institution.

“Making a will is an acknowledgement that your assets and money are yours”

You might wish to set up a charity, a trust in memory of a loved one or to a particular social need such as the homeless. Alternatively, you may want to do a combination of all these things: some money for your family, some for your staff, a proportion for good causes or some for special purposes.

Making a will is an acknowledgement that your assets and money are yours. When you depart, you want to do so in the knowledge that your descendents or legatees will dispose of your wealth in a manner you have chosen. Make sure all the results of your efforts don’t fall into the taxman’s coffers – or the wrong hands.

The answer is straightforward: make arrangements to see a solicitor experienced in these matters and make a will.

Alex Sealy is an associate solicitor at Slater Heelis.