This week in British Columbia it is “Make a Will Week“ making this a great time to talk about why small business owners in particular need a will.
Over the past few years I have witnessed the pain and financial struggle, even ruin, more than a few small business owners have had to endure because someone in their life passed away without a written will.
Two scenarios come to mind that best demonstrate why this week, I encourage you to take 10 and make an appointment to get your will done.
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Scenario 1: Passing the Business On to a Family Member
When I met Harjiit, from the outside everything looked great. He had an amazing production facility, great staff and a lot of loyal clients. At our first meeting I learned that 3 years prior his father who had started the business passed away without a will. He had worked with his dad in the company since he was a teen and they always talked about him owning it someday when dad retired.
Sadly before his 60th birthday, dad passed away leaving no formal plans to transfer the ownership to his son. Without a will, all assets that dad owned had to be sold including the business. Harjiit was able to use his portion of the estate to “buy” the business leaving him with no cash and fortunately through hard work, great customers, sheer determination and time he was able to rebuild.
Take a minute now and image your own situation without a will. Everything by law would be sold and the proceeds would be divided by whatever rules were in place at the time. Now take those assets and divide them in half because at the time of deposal of those assets tax is paid on the full value up to 50% or more. Is that what you would want to leave behind as your legacy?
Scenario Two: A Business Partnership
The second and equally tragic situation were two partners happily enjoying business growth in an exciting industry working towards taking their company public. In his mid 40’s, one of the partners passed away in his sleep. Not only had the surviving partner lost his best friend, but he would spend the next 3 years pulling their company back together entangled in costly legal battles.
The partners had talked excessively about creating a partnership agreement but never managed to get to the lawyer to lock it down. You see they were really really busy all the time. Because one had better credit than the other, most of the assets were in the name of the partner who had passed away, leaving an almost impossible situation for the surviving partner.
Having a will would have prevented these difficult situations.
These things can easily be sorted out with a quick trip to a Notary Public or Lawyer to document what you want to see happen when you die. I say “when” because we are all heading there eventually.
Why leave a mess as your legacy ? Instead with thoughtful planning now, people will focus on your amazing contributions to their life and celebrate everything about you instead of having the extra pain and confusion around their futures. Making your will now is just the right thing to do.
So this week is “Make a Will” week. Talk to your family and business partners today to discuss your plans and then book your appointment to get that document signed off by before the end of the month. That way, it’s done and you and the people you love and appreciate won’t have to worry.