Do Not Sell Your Business Without Reading This First!
18th October 2016
Reading the Small Print
1st March 2017

The Increasing Importance of Formalising Family Arrangements

It is perfectly understandable if a family agrees on something, the agreement is kept relatively informal, because all members of the family trust each other. The agreement could be about, for example, a gift of jewellery, or who can live in a house and at what terms, or who owns what assets. In some cases the arrangements may be in respect of assets worth hundreds of thousands of pounds, or just a few thousand pounds.

 Mostly these arrangements are not reduced to writing but beware. If something unexpected happens – death, bankruptcy or a subsequent family dispute the only evidence is what the parties say about the arrangements and agreements. This may be many years after the event, and time erodes memories and in some cases false memories may arise, and suddenly there is a problem. It may be with inheritance tax, with a trustee in bankruptcy or between family members who dispute what was agreed many years ago.

 The solution is to reduce these agreements to writing, and writing which clearly stipulates what was agreed. Like many stiches in time they will save nine later, or perhaps a better way of looking at things is to think that some money spent today on solicitors’ fees in drawing up a watertight document setting out what was agreed which will act as evidence later will save tens of thousands of pounds in the future.

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