We are currently facing the mountain of paperwork and responsibilities associated with the death of a loved one who did not properly prepare for their passing. While thinking through this stuff the thought of disaster preparedness came to mind and what would be the way to properly prepare for the sudden passing of myself or a business partner so that those who remained could continue on. Here are my thoughts:
Partnership / Corporate Agreement: Most states will immediately dissolve / liquidate a business partnership agreement unless the agreement has a continue after death clause that allows the estate to be paid off for their share of the current worth of the business. These payouts can also be paid by an insurance policy. Have an attorney look at the current agreement and amend as needed.
Personal Data: Business partners will need access to a copy of information like social security number, date of birth, birth / marriage / death certificates, and location of all agreements / wills. Having this information easily available saves tons of time for those left behind and make filling out the needed paperwork much easier. This information is best stored in one location like a safe deposit box.
Financial Data: Business partners will need access to insurance information, bank accounts, investment accounts, tax returns, current debts, title / registration of property, and any safe deposit keys that are connected to the business. Knowing this information will help create an estimate of the worth of the business to give the estate their fair share of the current worth. Plus if the partner that passed was in charge of these things it will make it easier for the responsibility to be handed to someone else.
Business Data: Businesses should have a master list of usernames and passwords for all local software, servers, online accounts, key safes, etc. This list needs to be updated regularly and a copy would be best kept in the same safe deposit box that the vital records are kept.
Advanced Directives: Just like for family members, the business partner will need to be able to act on behalf of the business in case the other partner is incapacitated in some way. Having these documents in order before this happens is crucial. Make sure to have a lawyer look over the document to make sure it is complete based on state laws where business is being conducted.
“Key Man” Insurance: If any of the business partners or employees are “indispensable” then key man insurance can be purchased by the business. This insurance policy pays off on death to help the company stay afloat until a replacement can be found. It is also important at this point to think about training and disbursement of business information. No one person in the company should have so much knowledge that they would sink the business even if they just left the organization one day.
Take the time to prepare for the worse to make life for those left behind easier to manage after your passing, and contact us for any assistance you need in this process.