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 Ms 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 homeowners, 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 homeowners have always envisaged passing the business to the next generation, the reality is often more complex, says Ms 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.”
Ms 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:
For care homeowners, 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 Ms 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.”
