Does your estate plan match your business plan?Posted on April 28, 2015 in Commercial , Private Client (Tags: Business Planning, Enduring Power of Attorney, Estate Planning, Wills)
The New Year is a great time to review your business plan. Many business owners take the opportunity to review their branding and marketing strategy, but have you thought about reviewing your estate plan lately?
Thinking about and being prepared for the sudden death or disability of you or one of your key team members may seem a bit depressing. However, it is really important to make sure that you and the key members of your business team have suitable estate plans in place, in case one of you does get hit by the proverbial bus.
If one key person in a business dies or becomes mentally incapable without an appropriate estate plan in place it can make life difficult for those left behind. A good estate plan can at least reduce their stress.
As a minimum, an estate plan should include an up to date will and enduring powers of attorney.
Your will appoints trustees (also known as executors) who will be responsible for administering and dealing with your estate when you die. You should also have an enduring power of attorney for property which names the person who you wish to make decisions on your behalf if you suddenly become mentally incapable.
You may have set up your business structure to include a company or business trust. But did you update your will at the same time? Are the people that you have named as trustees in your will suitable people to work with the directors of your company or the trustees of your business trust when you are no longer around?
Many standard business agreements, such as shareholder agreements and partnership agreements, include clauses which give certain powers to the trustees in the estate of any key party to the agreement. Are your trustees the right people to carry out your responsibilities under your business agreements?
If you do not have a professional trustee named in your will, you may wish to consider appointing one of your business advisors such as your lawyer or accountant. Hopefully your advisors are very familiar with your business structure and, if you die suddenly, time will not be wasted with them coming up to speed.
Have you thought about your digital legacy? In today’s business environment it is likely that you have online banking, a website for your business, an online profile (through LinkedIn for example) and online accounting services. Are you the only person who has the access or passwords to these accounts?
If you don’t feel comfortable with your answers to any of the above questions you should review your estate plan and encourage your business partners to do the same.