Mr X is the successful owner of a conservatory and glass installation company, recently remarried, with two small children, and is worth around £5m. Needless to say, he needed a succession plan for the company that would ensure his huge workforce would stay in employment should anything happen to him, and that his family would be catered for.

Mr X’s private banker asked us to look into all of the possibilities. Exploring the situation in more detail, James Hall, the lead lawyer on this case, found that 10% of the business was to go to Mr X’s second in command and this meant that, on the company side, the arrangements between the shareholders needed to be watertight. There are, to this day, three shareholders in the company; Mr X, an employee, and his wife, who owns some B shares in the company.

The appropriate shareholder’s agreement was put in place, and a cross option agreement was assigned. This was done so that if in the event of one of the primary shareholders passing away the remaining shareholder would not have the burden of looking after the business, but they would still benefit from the profitability of the company. It was designed to provide financial security to Mr X’s wife by paying out to her and into a private fund for the children for when they came of age.

If Mr X were to pass away then his life insurance pay out would go into a trust that was created. This would then create financial security for the business and employees, as well as for the family. From a personal point of view there were a lot of competing interests in this case. Mr X wanted his current wife, rather than his ex-wife, to benefit. A protected beneficiary of interests was written into Mr X’s will so that this would be the case, and money would also be put aside for his children from his previous marriage. In each case we worked for the best interests of all involved, ensuring money was safely put into trusts to be accessed at the right time. By working closely with Mr X and his family we have also managed to significantly reduce the tax burdens on their estates.

Thinking strategically is a speciality that we are proud to call a force amongst our arsenal for the benefit of our clients. In this case in particular there were a lot of external factors that needed to be taken into account in order to satisfy the needs of Mr X, who needless to say is satisfied that he has provided for his family and business should the worst happen.