The Importance of Having a Will for Business Owners
Running a business demands time and effort. Some entrepreneurs aim for their hard work to become a legacy for their children. However, if they pass away without leaving a will, the succession process can become lengthy and complicated.
In September, Mexico’s government and notaries conduct the “Will Month” campaign, encouraging citizens to create their wills to secure assets in case of death.
Carlos Pérez-Arizti, a partner at Baker McKenzie in Mexico, notes that having a will is not a common practice in the country, which poses problems for those who own businesses, are partners, or hold shares.
A will allows you to designate specific heirs, removes legal and tax uncertainty, and facilitates estate planning if you have a business.
Business Implications
When a founder dies without leaving an action plan or will, the company loses its operational rhythm, causing economic losses. Moreover, distributing dividends becomes complicated due to uncertainty about payment among those involved.
Additionally, if someone is a shareholder in a company without a will, their shares become temporarily unclaimed while an executor or person managing the assets is designated.
A will allows you to designate specific heirs, removes legal and tax uncertainty, and facilitates estate planning if you have a business.
Investment for Peace of Mind
Though it’s an emotionally challenging topic, Carlos Pérez-Arizti advises business owners, partners, and shareholders to create their wills as soon as possible to streamline the process for loved ones.
“It’s better to leave clear rules for your loved ones on what to do with the estate. They’ll have enough to deal with grief, and it would be more burdensome to handle succession.”
Furthermore, he recommends documenting everything to avoid disputes, especially in family businesses, as this may involve personal relationships.
Another reason Pérez-Arizti encourages business owners, partners, and shareholders to obtain their wills is that they view it as an investment that brings peace of mind regarding asset distribution. He even suggests taking advantage of the September discount to save money and time.
September Promotions for Wills
Throughout September, wills will have a discount of up to 50%. Free legal consultations with public notaries will also be available nationwide, with services extended to Saturdays, according to Mexico’s government website.
In the case of Mexico City, the cost for a will with public notaries is 3,800 pesos. This price will be in effect during September and October, as per the Mexico City Notaries College.
In this context, Carlos Pérez-Arizti’s recommendations are:
- Plan who will receive the company shares.
- In case of illness, discuss with heirs and have a written plan for asset distribution. This provides legal security.
- Establish what will happen in the company’s bylaws in case of a member’s death.
Although it may seem like just a formal procedure, for a business owner, partner, or shareholder, clearly outlining their legacy and ensuring their efforts endure with those they cherish—like children or close relatives—is crucial.
