While difficult and uncomfortable to think about, we are all going to pass away. The question is, what will happen to our families, loved ones, and people we care about when the time comes? Who will take care of our financial obligations, bills, and responsibilities? As Owner Operators, the process can be even more complicated and daunting. Having a plan in place if anything were to happen is critical in protecting those that are important to you from the uncertainty that accompanies a difficult situation.
You may be asking yourself, what is estate planning? Estate planning is: 1) controlling your property while alive and well, 2) providing for your loved ones and yourself if you become incapacitated or disabled, 3) giving what you have to whom you want, the way you want, and when you want, and 4) minimizing the impact of professional fees, court costs, and taxes. When you own a business, these concepts may hold even greater significance.
There are many benefits to having an estate plan. When a person dies, his or her property must be transferred to his or her heirs. If there is no plan in place, a court will often decide what will happen to the deceased’s property. This process is called Probate. During this court managed process, a judge will have the absolute discretion to determine where the property will go. Having an estate plan can eliminate the need for Probate and allows you to decide what happens to your property.
For Owner Operators, there are many other considerations beyond what will happen to your business if you pass away. For instance, what will happen if you end up in the hospital for an extended period of time and do not have the physical or mental capacity to manage your business? Will your spouse or a family member take over the business while you recover? Is that person the best person for the job? By creating what is known as a Financial Power of Attorney, you can appoint a particular individual to take the reins of your financial interests while you are unable to manage them. This document can prevent disputes between family members over who will have control, as you will have made that decision beforehand. Additionally, you will have the peace of mind knowing that if anything were to happen to you, someone you trust will be there to make sure all the bills are paid, the business will continue to operate smoothly, and nothing will fall through the cracks.
Planning for the future, in life and in business, is something that should be given ample consideration.