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what happens to my business if I die

what happens to my business when I die

You’re alive! And that means you can make sure your family doesn’t suffer (more than necessary) if something happens to you. But you have to take care of the following things NOW to make sure those left behind have a smooth transition.

Plan for your family…
If you don’t plan, your family will have upsetting legal paperwork to deal with, and the government will keep much more of your money than it deserves.

If you’re a business owner, plan for your business…
Your business is made of your blood, sweat and tears. It represents your livelihood, and possibly debt. You’ve got to plan for the worst so you don’t leave a huge mess to your family, employees, business partners and investors.

 Imagining our own demise makes us squirm, so let’s skip it and get right to the point – 3 steps is all it takes to make sure your family has what they need.

If you want true peace of mind, do these 3 things:

1. Get your legal affairs in order.

Your attorney will be your best advisor. Here’s what ours told us to do, given our family circumstances:

Will: document that spells out what you want to happen with your belongings and who will care for your minor children

Living Will: document that spells out how you want to be medically treated in the event that you’re unable to express your wishes or give informed consent

Trust: document that spells out who handles your assets, especially helpful when minor children or disabled dependents may be beneficiaries of your assets/life insurance

Here’s a documentary that will blow your mind and really help you to see how important this planning stuff is.


2. Get Life Insurance

Price is locked in based on your age and health, so the younger and healthier you are the lower your life insurance costs.

There are TONS of options, here are the basics:

Term Life Insurance: usually the most affordable because the coverage is for a set amount of years, and once the term is over, the life insurance is gone.

Term Life – Return of Premium: you pay more than you’d pay for the basic term insurance, but you get every penny back if you outlive the term.

Universal Life Insurance: permanent life insurance that gives you flexibility to use as a savings vehicle for borrowing or to skip payments.

Universal usually costs more than Term Life, but less than Whole Life.

Whole Life Insurance: permanent life insurance that is similar to Universal, but without the option to skip payments.

Here’s a great site that helps you figure out how much life insurance you should purchase.

The beneficiary is who receives the payout if you pass. Your beneficiary can be your loved one(s) or your business. If you have minor children, you may want to name your Trust as the beneficiary, where you can specify who is responsible for doling out the money to your kids for necessities, fun stuff, education, transportation, and so on.

If you’re a business owner, you’ll want Key Person Life Insurance, which pays the business in the event a key employee/partner passes. If the key person passes, the policy allows the business to pay the deceased’s share to surviving family members. This prevents the business from having to borrow money to pay what’s due, and keeps the grieving spouse from having to step in and learn how to run the business.

Business owners may also be glad to have a Buy/Sell Agreement. Whether you’re a solopreneur or have partners, you may suspect that your business should be/would be sold if you were gone. You can make a plan now and legally commit to who will buy your business and for what price or with what formula the value will be calculated. The payments can be made to your family and/or your family trust.


3. Make sure your family knows your plans (or at least let them know you have a plan)

According to a Consumer Reports study, “At least $1 billion in benefits from misplaced or forgotten life-insurance policies are waiting to be claimed by their owners.” Do not leave your rightful money in the insurance company’s pockets. Make certain your family knows that you’ve put your affairs in order, and that they know where to get the info if they need it. We gave our parents our wills, living wills, trust, and life insurance info. Plus, they know who our attorneys are.

If you don’t want to talk about it, put the paperwork in your safe, fireproof box, or safety deposit box. It will be found.

We walk our clients through this process all the time, I’ve done it for over a decade. But when it came time to work through my own plans, it wasn’t easy! The emotions that came up were challenging, but the most important thing is that you don’t let the emotions stop you. Feel the feelings, and keep going. Put your plans in place. You’ll get so much peace.
what happens to my family when I die

Give your favorite insurance agent a call and start the conversation today.  Let us know how we can help. We’re glad to support you with your planning.

And if you’re looking for a legal advisor, we’re happy to help you find a great one. Shine on.