Rights if husband passes away - limited company

Hi all. I am posting on behalf of a friend - her husband is in poor health generally, is in his late 50s. They have three young children. Husband runs his own business through a limited company for the last few years. Previously his business was structured differently and he had a much larger salary. In recent years his salary has dropped on his accountants advice ? tax treatment of business, he would now be on less than 40k pa. Business is doing ok but he is in poor health with a number of illnesses but has managed to carry on working.
The problem is he refuses to discuss ANYTHING about finances, making a will, life insurance, salary protection (none in place) etc. She is a public sector worker in a permanent post but is worried how she will cope if his health deteriorates or worse. He is 99% owner of his company with his brother 1%. He has a small pension that he pays into each year but its not likely to pay out much? - think value is about 100k. Anyway there is a large mortgage (>2k pcm) on their home which is in over 200k of negative equity. She pays this every month (not in arrears but he doesnt contribute as she bought the property before marriage - I know !). He buys groceries, pays for childcare and pays some bills eg tv licence, towards holidays etc. She pays esb, gas, health insurance, house insurance etc
She has tried talking to him but is met with silence or him changing the subject. Anyway she has no idea what her rights are in related to the company if anything were to happen to him or indeed if he has to give up work due to ill health . Any thoughts.

If you edit your posts into paragraphs, it will be much easier for others to read and you will get more and better quality responses.

The business part first - Is there a shareholder agreement in place for the limited company or failing that anything in writing that confirms his % ownership.

As to the personal aspect hard to say, keep trying.

Palerider said:

The business part first - Is there a shareholder agreement in place for the limited company or failing that anything in writing that confirms his % ownership.

Click to expand...

The company's annual returns on the CRO website will confirm this.

The company is his property and if anything happens it ownership of his 99% stake passes to his next of kin as with any other asset.

I don't know how she is going to get him to talk about it but as regards salary protection if there is none in place already then it's pretty irrelevant as if he is in such bad health it is highly unlikely he can take it out at this stage, same probably applies to life assurance. That might be part of his reluctance to discuss it.

"Anyway she has no idea what her rights are in related to the company if anything were to happen to him or indeed if he has to give up work due to ill health . "

A bit of marriage guidance coming up. Trying to work out her rights on an internet forum is going to achieve nothing other than some vague possibilities. In a small company, the main man is key - without him, the business will struggle.

Going back to my own parents, my father was the most ostrich like man you could ever hope to meet. If he did not want to deal with something , he did not deal with it. End of.

Over the years, my mother developed a series of techniques she would employ on him to try and resolve various, serious issues. Think insolvency, losing the family home, losing the business.......

The techniques:

Reasoning, pleading, sobbing quietly, the silent treatment, more reasoning, opening brown envelopes herself, locating paperwork herself, taking her own advices from a saintly accountant and, ultimately, taking over the family finances while letting my father believe he was still in charge.

The OP's friend needs to deal with the ostrich husband - him changing the subject won't wash. This needs to be a proper, adult conversation without the distraction of the young children. If it helps, having a trusted friend/third party can be brought in.

People can drift on like this forever ( until the ill health gets him) but it is not good enough when there are family and business issues at stake.

mf

What rights are you talking about here?

It sounds as if your friends should be more concerned about her responsibilities. If he gets too sick to work, she will be responsible for maintaining him. But she seems to be doing that already, anyway.

It might be worth your friend's while to have a word behind the scenes with his accountant. He may be happy to discuss tax and pension planning with the accountant. If you are concerned that his brother will somehow take over the company if the 99% shareholder dies, then the accountant might be able to raise that with him.

Likewise, there may be a solicitor he is willing to talk to. Strictly speaking, the solicitor or the accountant should not talk to the wife about these issues, but they may take a practical approach. Or they may listen to the wife's concerns without disclosing any confidential information.

Brendan

Many thanks for the replies. All advice will be passed on. Yes he is a difficult man aside from his health issues. He keeps all the stuff related to business locked away from everyone. His wife approached the accountant about one matter but was effectively ignored. All his documents are locked up in his "home place". Yes you are right about him being the main man in the business but he has refused to hire on help in the past. She has tried to discuss the issues of life/income protection with him and he says he will look into it but never does. She does everything in the house, for the kids etc. If he has to give up work it will be a disaster as she has to continue to work fulltime to pay the mortgage. She complained to one of his siblings and has been ignored by that sibling since even though she was sympathetic initially. Aside from all this he helps with nothing around the house and has little interest in the children. She is at her wits end and has been quite stressed about things but is now trying to accept there is nothing that can be done. He is set in his ways. His pension is with friends first - would she automatically have some small income from that or would she have to have her name on it; he took it out when single ? Also could the brother have a claim on the business in anyway ?

"She is at her wits end and has been quite stressed about things but is now trying to accept there is nothing that can be done."

That is not true - she can decide that she is going to do something about this - complaining to a sibling is not "doing something" -its being passive and sort of hand wringing helplessness.

How did she end up with three kids, in this situation, with a man who "helps with nothing around the house and has little interest in the children. "?

She needs to wise up and get on top of her own situation - none of the queries can be answered realistically on an anonymous board.

mf

She should also look for enduring power of attorney so she has control over his affairs if he is too sick.

That is if she get him to talk. Nothing will happen unless she can get him to talk. Does he even have a will? If things are tied up in probate for a long time, it can have a real strain on their finances and it will effect the kids.

How about going back to the accountant and asking him to help get things sorted?


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)

Thanks to all for advice. How did she get into this, I'm afraid I don't have all the answers but they were an older couple getting married and I know she wanted kids more than anything. I take your point about hand wringing but with a full time job and minding 3 kids she has a lot on her plate. Perhaps she turned a blind eye to his ways a little in the hope that things would change when kids came along. Anyway they live in a rural area and all her family and friends are in Dublin, which doesn't help. I take your point about speaking to the accountant and will recommend same. Other than that I'm not sure there's much more can be done. His siblings show no interest and all have their own issues. There is definitely no will in place. Thanks anyway folks.