How can I ensure my business runs smoothly after my death?

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As a family business owner a good few years away from passing the baton to my eldest son, succession planning had taken a back seat to the day-to-day running of my business. It wasn’t until my wife, an avid viewer of the TV series Succession, sat me down to watch the show that my eyes were opened to the challenges of balancing business continuity, family happiness and individual aspiration in these plans. I’m now pondering what I should be considering in terms of succession planning.

Headshot of Tamasin Perkins, private wealth disputes partner at Charles Russell Speechlys
Tamasin Perkins, private wealth disputes partner at Charles Russell Speechlys

Tamasin Perkins, private wealth disputes partner at Charles Russell Speechlys, says that even if it feels early, it’s important to recognise that succession planning cannot be accomplished overnight. Initiating the process well in advance (and continuing to review it) allows for a smoother transition and helps you iron out any unexpected issues that may emerge.

It is great you are thinking about these issues and that your son will benefit from your hard work and success. I’m assuming that you have already had a candid conversation with him about taking over the business, that he is eager to take on this responsibility and that you think he is the right person for the job. If this conversation hasn’t happened yet, it should be your initial step in succession planning.

Even though your eldest son may be the conventional choice for succession, it’s essential to assess whether he shares your vision in relation to the business and has the necessary skills to lead and manage it effectively. Are there any gaps in his experience or skills that you could help him with now? Were you to conclude that your eldest son is not the ideal candidate to lead your business (family dynamics do change and you are free to change your mind), it is better to tackle that issue head-on and be accountable for your decisions.

Are there others who might expect to inherit or who might need looking after, such as other children or any spouse, particularly if they are working or benefiting from the business now? Think about what provision you might make for them and what role, if any, you want them to have. Don’t postpone battles until after your death. It is kinder to make difficult decisions early on and transparently and it is better for business continuity. Your family would rather hear the truth from you than from a third party, especially when grieving. Write down what you might want to say so that you get it right when the conversations happen.

There will need to be coherence between your business plan, which outlines the strategic direction and operational aspects of your business, and your succession plan, which details how leadership and ownership will transition in the future.

Consider a gradual, stepped succession plan to avoid disruption and loss of value to the business. Be clear about your role — and document it in a formal agreement — so that you are not left powerless on any transfer. Your son should feel confident to take the business forward, but you will want to have a continued oversight and veto, at least at first.

Although family comes first, there is more at stake for business owners. There will be employees and service users who will want personal stability and no business disruption. Have a communication plan for them. Talk to your key stakeholders, including those providing finance and your leadership team, to get their buy-in to your son’s new role.

No one wants the all-out war of Logan Roy’s family in Succession, but disputes can happen. Appoint executors who are robust, understand your business and lack a personal stake. This could be an independent professional or someone outside the immediate family who knows the realities of your business and who can take the emotion out of any dispute.

Does a heat pump add value to a property?

We’re interested in installing a heat pump, as our boiler probably only has a year of life left in it, but although we think we’ll stay in our house in the north of England for at least five years, our plans might change. Does a heat pump add value to a property? When would we start to see savings on our energy bills compared to installing another gas boiler? And what else do we need to consider?

Headshot of David Leviseur, chief executive of Fornax Energy
David Leviseur, chief executive of Fornax Energy

David Leviseur, chief executive and co-founder of home decarbonisation start-up Fornax Energy, says unlike traditional boilers, which create heat through burning fuel, heat pumps transfer energy from the outside air into your home, using it to heat water without producing combustion emissions. 

Because only a small amount of electricity is needed to power this process, they are remarkably energy efficient. A well-designed and installed air source heat pump should use 3.5 to 4.5 times less energy than the average gas boiler. Specialist heat pump tariffs offer rates as low as 15p/kWh, while getting off gas also saves you the standing charge.

As for set-up costs, under the boiler upgrade scheme (BUS) homeowners can currently get a £7,500 government grant which brings the average installation cost down to around £5,700. This is around £2,300 more than if you were to get a replacement boiler installed. The aforementioned potential bill savings could pay back that difference in under five years.

Note that the BUS grant is becoming increasingly popular — October 2024 was the highest month for applications since the scheme began — and it won’t last for ever. It’s currently set to run until 2028 or until the money runs out, and it’s reasonable to expect that the grant amount may become less generous in the future.

On property values, research by Scottish Power and WWF suggests a heat pump can add up to 3 per cent to a property’s value, equivalent to between £5,000-£8,000 on average. And, as awareness grows of the financial and environmental benefits of heat pumps, it’s not unreasonable to expect this value to grow. 

Innovative offerings that wrap installation, servicing, support and the ability to spread the upfront cost over time are entering the market. Some of these give you the flexibility to transfer your plan to a new owner if you decide to move house, which means you’ll only end up paying for the period in which you’re benefiting from the heat pump yourself.

Although your boiler still has about a year left, don’t leave your decision too much longer as some homes require additional planning work and electrical upgrades which can extend that timeline to a few months. The good news is that the government is set to relax planning rules for heat pumps which will shorten those longer timelines.

Our next question

I am on a five-year work assignment in the EU and face problems with the mortgage on my family home in London. I have an HSBC loan with a 1.5 per cent interest rate fixed until 2027 and the lender has granted me “consent to let” (CTL) to rent out the home. The bank has just extended the CTL by 12 months but says it will expire next year after 39 months and after that I will need to either arrange a buy-to-let mortgage or repay the mortgage. What are my options?

Finally, it’s important to find an expert installer. They’ll survey your home in detail and accurately measure the building’s heat loss. This means you’ll have a system the right size for your home. Oversize it and your bills may be higher; undersize it and you may not be as snug in the depths of winter.

The opinions in this column are intended for general information purposes only and should not be used as a substitute for professional advice. The Financial Times Ltd and the authors are not responsible for any direct or indirect result arising from any reliance placed on replies, including any loss, and exclude liability to the full extent.

Do you have a financial dilemma that you’d like FT Money’s team of professional experts to look into? Email your problem in confidence to [email protected].

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