What happens to a partnership on the death of a partner?

On the death of a partner, the future of the partnership depends on if there is a partnership agreement in place, and if it covers the death of a partner. 

If a partnership does not have an agreement in place, or the agreement is silent on what happens on the death of a partner, the Partnership Act 1890 must be followed. Under the act, a partnership is immediately dissolved on the death of any one partner, even if the surviving partners wish to continue.

It is therefore imperative that if the partners wish the partnership to continue following the death of a partner, they must have a valid and binding partnership agreement in place. 

It also important that all partners have a valid Last Will and Testament in place outlining their wishes for their partnership share on their death. The partnership agreement and Wills should match however, if they do not, the partnership agreement would take precedence. 
 

How can Charlton Baker help you?

If you would like assistance in drafting your Will to ensure your partnership share passes in accordance with your wishes and is also tax efficient, please contact us 01380 723692 or email us here. 

Here at Charlton Baker we are qualified do deal with all of your Wealth, Will and Probate matters. Please visit our Wealth, Wills & Probate Services page, or contact us for more information. 

Other topics you might find useful:

Why do I need a Will?
Characteristics of a valid Will
How often should I change my Will?
How do I choose an executor for my Will?
What is probate and how does it work?
Why do I need a Lasting Power of Attorney (LPA)?
What happens to limited company shares on the death of a shareholder?
How do you pay Inheritance Tax when you have no access to the funds?