Leaving a legacy: considerations for entrepreneurs

Over the last two years, we’ve been running a series of webinars with The Women’s Chapter aimed at helping female entrepreneurs feel as confident in managing their personal finances as they do managing their businesses.

Most recently, we hosted a conversation about legacy. Our panel shared thoughts on what legacy means to them, how it applies to their work, and how we can all take a proactive approach to what we leave behind.

You can watch this webinar now, or read some of the highlights below, featuring views from Michelle de Klerk, founder of The Women’s Chapter, Brooke Pugh, an Investment Director at Investec Wealth & Investment (UK), and Lucy Chamberlain, founder of CNC Search and CNC Search Academy.
 

What is legacy?

Legacy can mean many different things. Its dictionary definition typically relates to the money and property we pass on when we die, but it can also extend to what we’ve achieved, and the way we remain in the thoughts of our loved ones.

Lucy paints a vivid picture of what legacy means to her, saying, “When I think about legacy, I think about footprints in the sand. I want those footprints to be things that have made a bit of a difference in the world, no matter how big or small. A talk I’ve delivered that’s touched somebody, or one of the amazing women in my team that I’ve trained, and the difference it's made to their confidence or competence.”

For Brooke, there are two sides to the coin. She says, “When I think of legacy, initially I think about what I am leaving behind for my children. I think legacy comes in two forms, one being the physical side in the form of assets, and then the emotional side; the impact you’ve left behind.”

The importance of planning your legacy

While we’ve all likely given some thought to legacy in these broad terms, it’s all too common that we don’t consider the specifics of what we plan to leave behind and how until we’re forced to face those decisions, usually at the worst possible time.

Michelle recommends, “It’s often at times of crisis that you end up having these conversations, but what we want to do is encourage people to not leave it to that point. We want to encourage people to put plans in place so that it’s less stressful than having to make big decisions in difficult circumstances.”

Making a will

A will is an essential foundation in your legacy plan. Brooke is keen to stress their importance, saying, “We will always encourage our clients to make sure they've got a will in place because you don't want to die intestate. It makes things really complicated and just draws out the process.”

Many people put this off as it seems morbid, but it can give you valuable reassurance. Michelle recalls, “I remember making my will was an emotional process. You’re required to consider all sorts of different eventualities; what do you want to happen to your money? How do you want your children to receive their money? What if they’re not old enough to receive it when something happened to you? I remember being tearful and upset, but it helps to consider how you can best provide for them.”

Reducing your tax bill

While minimising the tax due on your estate may not seem like a priority, Brooke shares that many of her clients change that view when they see a figure in pounds and pence and think about what that could mean for their loved ones.

She says, “Often before people come to us, the biggest beneficiary of their estate is the taxman. However, there are different vehicles available to help with inheritance planning. Some are long-term, such as trusts, and some are shorter-term: there are lots of options. The earlier you start thinking about inheritance planning, the more options you have.”

Leaving behind a business

For many entrepreneurs, their business is one of their largest assets. In the event of their death, their stake in the business is treated just like any other asset, meaning that, unless specified otherwise, it will typically be inherited by the closest living relative (rather than by a fellow owner). So, it’s vital for business partners to have these conversations and make plans long before the issue arises.

Not only is there monetary value in having these difficult conversations, but there can also be other positives. Lucy, who owns a family business with her brother, shares that, “There's a lovely sense that we're leaving this broader legacy for our family. I love the fact that what I'm doing might benefit my nieces and nephews, there's something special in that for me. So, my tip with this would be to try and find the deeper ‘whys’ around what you're going to leave and how you're going to leave it.”

Starting your legacy plan

If you’ve overlooked any of the issues we’ve discussed, the best time to catch up is now. Michelle urges, “It’s never too late to take control. There are steps we can take and measures we can put in place to future proof what we have built, for ourselves but also for the people that we leave behind.”

Brooke reiterates, “There is still time to make a difference. If you’re starting to consider legacy options, I'd encourage you to get in touch. That initial chat costs nothing and it may just give you a bit of peace of mind.”