Self Employed: Estate Planning: What Happens To Your Business If You Die?
Every self employed person should consider what happens to the business if you die. Even if you expect the business will end, the fewer loose ends you leave the person who will handle your estate, the more you will maximize what is left for your heirs.
Keep track in one place a list of all your business assets and where they are located. If you run your business through a separate entity such as a corporation or a limited liability company (LLC) be sure to distinguish between your business and personal assets.
Include receivables from clients - or where to find the list of receivables. Include the client's contact information as well as the amount due.
Liabilities and Potential Liabilities
Also keep track of your liabilities. Include:
- Any guarantees you may have provided for loans for a family member or friend.
- Any lawsuits in which you are involved. Include a list of the cases, the attorney(s) you are using, and their contact information. Update the list regularly.
In an age where your most current and important information is likely to be found in a password-protected area of your computer, telephone or other mobile devices, the person in charge of setting your estate (your Executor/Personal Representative) may need to gain access. Give your Executor/Representative a complete list of your computer, e-mail, and voice mail passwords. Update the list regularly. (There are websites where you can store passwords. If you consider this option, be sure it is a secure site - and give information about the site to your Executor/Personal Representative. For information about wills (and how easy they are to write if you do not have one or to update if you do, click here.)
List of Instructions
Prepare a list of instructions for the person who will be in charge so he or she can oversee completion of open projects and fulfill your wishes. Review the list with the person sooner rather than later so that he or she can make an informed decision about taking on the job and have a chance to ask questions.
On A Personal Level
While you are doing planning for the busines, it is equally important that you tie-up the loose ends ofyour personal life. For example, everyone should have a will that is up-to-date and challenge proof. It doesn't have to be expensive to write a will. For more information, click here. Everyone should at lest think about executing adavnce health care directives. They are free and easy to obtain and execute. They make sure your medical wishes are carried out even if you become unable to speak for yourself. To learn more, click here.
It is also advisable to pre-plan (not pre-pay) your funeral arrangements. To learn about funerals, click here.