Skip to main content

Insight article

July 1, 2021

Succession planning for sole traders

While nobody likes to think about what might happen after they’ve died, it pays to plan ahead.

James McMullan proposes five tips for helping sole traders prepare their businesses and estates for life after death.

Treat succession planning as a process rather than a one-off

Sole traders need to create a succession plan for their business and personal affairs. Could a staff member fill their shoes if they died? If yes, why not start training them today? Or consider entering into a partnership with them. In this case, you would need to create a partnership agreement, which, amongst other things, sets out what would happen to the business if one of you were to die or lose capacity. Sole traders must obtain specialist legal advice before entering into a partnership agreement to ensure it’s tailored to their needs.

Include your business in your will

When a sole trader dies, their entire business forms part of their estate, and they can decide who will inherit it under the terms of their will. If they do not make a will, their business will pass to someone under the intestacy rules, and their business could then fall into the hands of somebody who does not have a business mind.

Think about who to appoint as your executor(s)

Sole traders should appoint someone with the skill set to run their business, even if only for a limited time. Their executor(s) should understand the business and retain and realise its true value before it is passed on to any successor or beneficiary or sold.

Make a list of your assets – and keep it up to date!

Sole traders should make a business assets and liabilities list and keep it up to date with their will. If they update it every year, it will help their executor(s) to administer their estate more efficiently. It is important to consider any digital assets a sole trader may own and include them in a schedule of assets and liabilities.

Put a Lasting Power of Attorney in place

Death is not the only reason you may not be able to work or manage your affairs. Illnesses such as Alzheimer’s and dementia are on the rise. If you are temporarily or permanently incapacitated and therefore unable to work, a personal and business affairs Lasting Power of Attorney (LPA) will allow a sole trader to appoint someone to continue running their business or, if necessary, sell it while it still has value. You must consider making an LPA to cover this possibility.

If you are a sole trader, why not give private client partner James McMullan a call today to discuss your options?

Note: This article is not legal advice; it provides information of general interest about current legal issues.

Stay in touch

Subscribe to our newsletter

Stay in touch

By completing your details and submitting this form you confirm you are happy for us to send you marketing communications and that you agree to our Website Privacy Policy and Legal Notice and to us using Mailchimp to process your data.


Sending

News/Insight

  • Completion and post-completion steps in a sale: Final steps for sellers
    A guide to completion and post completion steps in a corporate sale including exchange, stamp duty, Companies House filings and key administrative requirements.


    Read more
  • How to protect your brand: A beginner’s guide
    Trademark protection for businesses explained, including how to register a trademark in England and Wales and the key steps to protect your brand.


    Read more
  • Inheritance Act claims and letters of wishes: Managing risk in estate planning
    This article explains who can bring a claim, the strict time limits involved, and the risks for executors and beneficiaries. It also explores how a carefully drafted Letter of Wishes can provide valuable context, demonstrate intention, and help reduc


    Read more
  • Confusion as Companies House rolls out identity checks for directors 
    Company directors are being urged to familiarise themselves with new identity verification requirements being introduced by Companies House, as confusion is reported around how and when the checks must be completed.


    Read more
  • Transactional documents in a corporate sale: What sellers should know
    Once due diligence is complete and terms are agreed, the focus turns to negotiating the transactional documents that underpin a share or asset sale. This guide explains the purpose of the key documents involved in business acquisitions and why carefu


    Read more

What they say...

  • Laura Kelly, February 2026
    Review of legal guidance received “I recently worked with Patrick Simpson on my settlement agreement. Patrick guided me through every stage with exceptional care and diligence. He kept the process moving efficiently, always updating me promptly

  • Prasanna Sooriakumaran, February 2026
    “Really good, especially at dealing with the company that tried to overplay their hand. I highly recommend.”

  • Sharla Munian, February 2026
    Outstanding Legal Support and a Brilliant Result “I cannot recommend RIAA Barker Gillette highly enough. My solicitor supported me throughout a very challenging property litigation matter, and thanks to her expertise, dedication, and strategic

  • Client, February 2026
    Very good service in disagreement with architect “RIAA assisted me in a conflict I had with my architect, who wanted to overcharge me. The end result was satisfactory, with invoices reasonable despite being slightly higher than expected!”

  • Sharla Munian, February 2026
    Outstanding Solicitor Who Delivered the Outcome I Hoped For “After a number of years navigating a complex financial settlement following my separation, my solicitor has been incredible from start to finish. Their professionalism, patience, and

Read more
Send this to a friend