Consider your business and family
What will happen to your business and your family if you die unexpectedly?
About two years ago we were consulted by Susan, the wife of Brett, who was a business owner that passed away without leaving a business or personal will.
About five years ago Brett and his business partners decided to obtain life insurance to fund a buy out in the event of one of them dying. They had the right intentions as the business was growing and they were worried about raising the money to buy out a deceased partner.
They met with their insurance broker who organised quotes for the appropriate policies, and made an appointment to see a solicitor to draw up a document that would set out the terms of the buyout should one of the partners die. These are known as “buy/sell agreements” or “business wills”. Unfortunately they never went ahead with the insurance or the business will.
Brett died about two years ago. Because he did not have a personal will, he died intestate and it has taken this long to get assets transferred to his beneficiaries. This process would have been much more timely and cost effective if Brett had a will. Susan has had to divide a large proportion of the estate between herself and the children of Brett’s former marriage.
Worse still, Brett’s business partners have to come up with about $6million to pay out Susan – but they don’t have the money and can’t raise the finance.
If the insurances and business will were in place then the buyout would have occurred smoothly. The remaining partners would own the business without debt; and Susan would have the proceeds of the business policy. Instead they are all now far worse off.
This story should prompt every business owner to review their personal and business circumstances and agreements. Death is inevitable and something that should be discussed. Contact us to find out how to protect your business and family.