Thursday, May 13, 2010

The Value of Planning


Yesterday I got some sad news. One of our clients died unexpectedly. He was under 40 and left behind a family and a business. While tragic, this isn't a rare event.

Are you prepared if this tragedy were to strike you or your business?

I'm not.

I know the importance of having a will yet I don't have one. If you die without a valid will, state law dictates how your estate will be divided by your heirs according to very specific set of rules. Your friends, favorite relatives and charitable benefactors will get nothing despite your intentions. The only way to not follow the state distribution process is to die with a valid will.

It is probably best to use an attorney but that isn't necessary. Check with your state to determine what form (In writing, witnessed by two people, etc.) a valid will may take.

I've had "getting a will" on my to-do list for years. I'm going to get this accomplished before the end of summer.

On the business side, it is important to consider and plan for the death of owners and key employees. You can use key person insurance, buy-sell agreements, life insurance, and similar techniques to prepare for these contingencies.

A business can have considerable market value which can dissipate quickly upon the death of an owner if proper plans are not in place. I've seen businesses lose half their market value or more when the owner dies without proper planning.

I'm meeting with an attorney next week to put in place the necessary plans so that my untimely death or disability doesn't compromise my business, family, coworkers, or clients.

2 comments:

Keyman Insurance said...

Great post. Just goes to show how important keyman insurance is nowadays.

Brian C. Setzler said...

Keyman Insurance shouldn't be overlooked as part of a risk management strategy. I don't see enough businesses that have it to protect them against certain risks.

Because your post seems like it might just be an attempt to drive traffic to your site, I want my readers to know that my firm offers Keyman Insurance through www.TriLibriumWM.com.

I don't generally use this blog to advertise but I'm not going to let others use it for that purpose without at least commenting.