Let’s face it; everyone is going to die at some point in their life. Unsurprisingly, estate planning is a task that most business owners do not want to consider; for that matter most people do not want to consider what is going to happen when they die or if they become incapacitated. The Estate Planning phase of the Business Legal Lifecycle is about looking to the future and what will happen with your business, assets and family when you die or if you become unable to continue working in the business.
As unpleasant as it may be, you need to take action as early on in the Business Legal Lifecycle as possible. However, you will so often be caught up in running and building your business that you don’t have time to take the necessary precautions for an event that may not happen for a long time. This is the reason why I have put this phase at this stage of the Business Legal Lifecycle. Once you have a sustainable business, you have a valuable asset you need to protect in the event of your death or incapacity to protect your family and business partner(s). Ideally, the Estate Planning phase should be done much earlier but the Business Legal Lifecycle is a realistic model and I have found that in the overwhelming majority of cases, it is best for this phase to occur at this point in the Business Legal Lifecycle.
Dealing with your estate in the event of your death or disability is of critical importance to you as a business owner. If you don’t deal with it, your family, friends and business partners could be left to clean up a mess that could have been easily avoided with properly drafted documentation.
Once you die or are disabled and cannot communicate properly, you will lose control over what happens to your business, so in order to ensure that your business is not affected any more than absolutely necessary, you need the correct documentation in place. More importantly, you need to make sure that your family is protected so that they do not have something else to worry about on top of your death or disability.
You need to consult with your lawyer, accountant, financial planner and other business advisors on these topics to ensure that they all work together to document and carry out your wishes correctly. It is also critical that you review these documents at least every two years as situations change. They are not documents that can be drafted and then forgotten about for 20 or 30 years; they require constant appraisal and consideration to ensure that your legacy goes where you want it to go.
I have seen many business owners fail to do this properly because they did not want to consider their own mortality. However, what I see is that where a business owner does consider this phase properly, they take the time to get the right advice and follow it. This is a relief to them as they know that their family and business will be dealt with in the way that they want them to be in the case of their death or disability.
Once these protections are put in place you are then ready to enter the next phase of the Lifecycle, Investing in Property.
Do you have a will in place?
Do you have a Power of Attorney in place?
Where you have a business partner, do you have a buy/sell option
agreement in place?
Do these documents properly outline what you want to happen to your estate when you die?
Is your family protected in the case whereby something happens to you?
Is your business protected in the case whereby something happens to you?
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