Along with personal planning, if you have your own business or are a partner in a business, you need to consider arrangements for your business ownership interests after your death.
If you are a sole proprietor or jointly own a business with others, hopefully, you have contingency plans in place in the event of the unexpected passing of one of the key principals.
Your lawyer or your business partners should have the document that verifies how to proceed with the next stage for the business - who will take charge and what will change.
Whatever happens, tangible assets will need to be appraised for distribution - whether the business is sold, liquidated, or redistributed among the partners. Outstanding loans may be called for immediate payment. Refinancing activities may be renegotiated. Taxes will need to be filed and paid until the deceased's share is liquidated or other avenues are arranged.
While your lawyer will be able to help with the legal formalities, consider designating someone to act on your behalf to ensure an orderly transition.
It is best if your family is aware of your wishes, and all parties are clear on your succession plans.
A friend of mine, whom I met early in our careers, shared her 'business ownership' nightmare with me one evening.
Her father had been a "successful" businessman, who unexpectedly died at a young age. Her mother was not involved in the business and was unaware of any continuation plans for it.
The family business collapsed after their father's death, and they were faced with a staggering debt load from the business and unpaid taxes.
The lack of any pre-planning for business contingencies - like the death of the owner - resulted in my friend and her brother living at home and working to pay the business debts and taxes in order to maintain the family home for their mother.
All of the issues that one faces upon the death of a loved one are similar to the ones that one faces with a business:
To facilitate this, you will need to make a list of everything that needs to be addressed and/or closed out, such as:
If the intent is that your solely-owned business will continue after your death, it is critical that you designate someone to legally take charge of post-death business affairs.
Your family should be appraised of that person and any legal agreements regarding the succession - a copy of the document would be best. Also, ensure that the family has some idea of the business' current financial situation. They needs to be aware of future changes that would impact them directly, including future equity ownership, distributed assets, and liabilities.
If you have a business partner, you will hopefully have a legal contract on the disposition of the business and its assets upon the death of one of the partners/owners.
You will need to ensure that this is very explicit with respect to how the other owner(s) will compensate the family you leave behind for your share of the company's value.
Again, your lawyer and your family should have copies of these arrangements, and the documents need to be current.
If you receive royalties for your work, remember that the royalties continue after your death.
If you are an author, musician, actor, painter, photographer, songwriter, engineer or inventor with patents, this applies to you and all the other creative and innovative professionals who collect royalties, regardless of the field (from windshield wipers to medical devices).
With your lawyer and financial planner, you should be looking at various options, including:
All of this needs to be clearly addressed in your will. Work with your lawyer or financial advisor to ensure that these are appropriately directed after your death.
We have included links to other resources for more information below.
In conclusion, nothing will tear a family or business apart as quickly as arguments over money. Having the distribution of any assets clearly and legally established prior to your death is a blessing for those you leave behind.
Generally, patent royalties become the property of the estate. The following links provides some general information, but again, we suggest you consult with your lawyers and financial planners for more specific information
Remember: - unless a bank account is a joint account, you will not be able to access the money. Did the deceased qualify for government benefits?
Generally investment accounts have specific beneficiary designations. These portfolios may be taxable or non-taxable retirement & educational savings or cryptocurrency accounts and more
Step-by-step guide on what to do first. Calls, Paperwork, Care Arrangements and more...
Where do you start? Physical remains, funeral options, death certificates, memorial services and more...
Key reminders on seuring residences - owned or rented, apartments or houses - after a loved one's death
What you need to know to protect and eliminate the deceased's digital presences
Funny, helpful and special stories that others have shared to helpyou through the process
Funny, helpful and special stories that others have shared to helpyou through the process
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