‘Tributes after Shropshire pub landlord dies at 65’, ‘Wolverhampton-born professional wrestler and pub landlord dies aged 64’, and ‘Former Scunthorpe pub landlord dies’.
These are just three headlines that illustrate that not only does death comes to us all at some point, but that the trade is not immune from life’s call for last orders.
While it can be a difficult subject for many to think about, the issue of how you would like your estate to be handled in the event of your death is hugely important, especially so since the law changed in October 2014.
For business owners, putting instructions in place for family is critical because it is likely that interests in a business and any wealth built up through the running of it will make up a key part of what is left behind for loved ones in the future.
Cashflow
Few think about what may happen to their business interests when they pass away. Who would be entitled to their share of the pub (if it’s a freehouse)? If it were to pass to their offspring, are they old enough and in a position to handle the responsibilities that taking over a business may entail? What impact would any dispute regarding their estate have on business cash flow and its reputation? Are they likely to be granted a licence?
Importantly, and a point highlighted by Brakspear CEO Tom Davies is that tenancies are not necessarily assignable: “Tenants can’t pass them [the lease] on, but we are an understanding company and if the person left behind can run it well then it is likely they would be given that opportunity.”
The brewery supports the view that tenants ought to have a will, and Davies says: “A will should protect personal assets held in their business.” Clearly, the possible loss of livelihood makes the need for a will and financial provision even more acute.
Research has shown that the public is failing to consider what happens to assets when they pass away. One study revealed 60% of British people don’t have a will and 47% of Britons say they have no idea how assets are distributed after death.
There are many urban myths that have sprung up over how an estate can be divided. These myths may be distorted further by the introduction last October of the Inheritance and Trustees’ Power Act 2014.
Intestacy
Put simply, intestacy arises when a person dies without a will being left in place and the issues that can be caused by this are not to be underestimated; there are many cases involving a property worth more than £450,000 where spouses have had to face up to the worrying prospect of having to take legal action in order to remain in the building they’ve called home for many years.
In essence, when someone dies intestate, the law, not the deceased, determines where the estate goes. Now add a business into the mix and the situation is even more complex — it’s quite possible for a surviving business partner to find themselves working with someone with no experience or someone they loathe.
So while the aim of the new legislation was to make it clearer and fairer in terms of distribution of wealth following an intestate death, the reality is that survivors can still end up squabbling and having to pay lawyers to secure what they believe is rightfully theirs.
In a nutshell
- The law changed in October 2014 with the introduction of the Inheritance and Trustees’ Power Act 2014
- Seek expert advice and have a will drawn up
- Make sure those around you know that a will exists and where it is
- Consider the succession issues that will affect the ownership and running of the pub
Advice and support
The Licensed Trade Charity (LTC) offers support to the trade needing advice via a free help phone number on 0808 801 0550. Satu Dahl from the LTC says each call is different so, when someone calls the helpline, the LTC tries to find out what their individual circumstances are and tailors support accordingly.
The LTC has a webpage that offers guidance to those in the trade in need of help following a bereavement.
And in it’s autumn 2015 edition of Open Arms, the LTC gave detailed information on how to plan a funeral — good advice for those who are vulnerable.
Open Arms is available from kath.gill@ltcharity.org.uk to those that the LTC has previously helped.
As a charity, the LTC is grateful to receive income via individuals and their wills, and its legacy booklet offers guidance on how to write a will and the tax aspects of making a will while debunking some of the jargon.
The booklet is available from info@ltcharity.org.uk.