As a business owner it's vital you adequately plan for the future of your business and that means making sure your assets and operations are looked after if you become unwell, have an accident or die. Estate planning isn't a nice to have for business owners. It's an essential piece of equipment in your business tool chest.
Let me tell you a story that's true.
On the 2nd January 2020 the unimaginable happened to the Simpson family.
At 7pm their mum, wife, matriarch and doer of all things had a massive heart attack. Out of the blue. Unexpected. Unplanned. Without warning.
By 8pm she was on life support in the intensive care department of an inner-city hospital.
Friends and family were called. Staff were called. Meetings were cancelled. Plans were made.
In the midst of the most traumatic time of their lives, when Veronica's people needed to give her their everything - they were scrambling, trying to work out what to do with her manufacturing business if (and when) the worst would transpire.
Five long days later Veronica died.
She was 46.
She was a mum.
She was a wife, a daughter, and a friend.
She was a business owner.
But she was also the leaver of a shit show.
This isn't a story about sudden and unexpected death. It's about the fallout.
Despite how it might seem on the surface, this isn't a story about the sudden unexpected death of a woman with three young children, in the prime of her life.
As a death lawyer, every single person I meet has a death story. Without exception, every one of those deaths has been a surprise package.
No, this story is about the carnage that got left behind when Veronica died without an estate plan.
"The opportunity to grieve my friend and boss was stolen and replaced by confusion, fighting between her family members and an overwhelming fear that everything was not going to be ok."
When Veronica died she was the CEO, CFO, COO, CMO.... all the CO's you can think of for a small but successful manufacturing company. She was also the sole Director.
She took the responsibility for keeping abreast of every single aspect of her business very seriously - from her credit card number to the latest $60,000 order, everything that made the business tick was tucked safely in her head.
Fine when your head is attached to your body, which is safely seated in the leather chair behind your office desk.
But not a lot of use when your head is in ICU. Or worse.
When Veronica died nobody knew who would (or should) take over the day-to-day operations of her business, let alone all the more complicated trappings:
A staff of 10;
A car fleet of 3;
A commercial warehouse lease;
A massive business loan;
A list of creditors;
An enviable number of retailers and;
A collection of highly valuable patents.
If you're in business I'm sure you'll agree there are some weighty assets in that list.
Veronica had nothing in place to protect them if she wasn't there to keep everything glued together.
The difference an estate plan would have made
We often think about wills and estate plans as a safety net for our personal assets but they are just as important for business owners.
Just as a will is crucial for protecting the people you love after your death, it's also vital for protecting potentially your biggest asset of all - your business.
Without a will Veronica had no say in who her company passed to, who would pick up the day-to-day operations and what she wanted to happen to her legacy.
Instead, her legacy became a long drawn-out, costly probate process that her family had barely enough emotional energy in the tank to face.
In a few short weeks, most of her staff left their jobs; unsure who they worked for, if they would be paid and if the business would survive.
Her family started playing the game I call "what the dead person would have wanted", arguing about which of them Veronica would have chosen as her successor.
Clients and suppliers walked in droves, leaving a shell of a business in their wake.
All the time, energy and money she'd invested in building a successful, profitable, business legacy crumbled.
There were no winners.
If you employ staff, have a business asset and have company responsibilities, you need to create the right legal structure around your business and protect it with an estate plan.
If you own a company*, it's important to sit down and plan your estate to protect your hard work and legacy if you were to die or if you were unable to continue operating due to illness or injury.
Estate planning is more than leaving your house and antique coin collection to your kids - it's about protecting the people you love and the people you have a duty to look after.
*if you operate a business as a sole trader a different set of legalities apply. You can find out more at THIS blog post