What happens if you become mentally or physically ill? What happens if you have an accident?  If something happens to you, who will look after your affairs?  Can you imagine your family having to ask what should be done or could be done because you did not put your affairs in order?  Yes, you are busy at work and managing the lives of your children, but if you are reading this article and have not considered an estate plan, you need to do one now.


      As a businessperson, you probably encounter problems every day and are used to crisis situations.  But are you doing what is necessary to avoid crisis situations in your own affairs? Unfortunately, there are many business people without any type of plans.  Most people wait until someone in the family dies or is diagnosed with an irreversible illness.  By this time, however, it is often too late to ensure all of your wishes can be carried out. Therefore, you need to take time to plan your estate before a crisis situation arises.


      You need three estate planning documents:

an Advance Directive and Appointment of a Health Care Agent;

a Durable General Power of Attorney;

and a Will and / or a Trust.


By appointing a Health Care Agent, you enable another person to attend to your medical affairs if you are incapacitated.  On your behalf, your Health Care Agent can make choices, such as, your living environment, your physicians, and, if necessary, to withdraw treatment.  The powers of the Health Care Agent are significant therefore choose your agent wisely.


      The Advance Directive (“Living Will”) enables you to set forth health care decisions before certain conditions arise such as end stage condition or vegetative state. These decisions may include whether to withhold or withdraw life-sustaining treatments.


      A Durable General Power of Attorney allows you to give the authority to one or more persons to conduct your personal financial affairs when you are mentally incapacitated. These financial affairs may include your banking transactions, purchases, sales, investments, litigation, retirement benefits, and so forth. A Power of Attorney is relatively inexpensive and uncomplicated to establish and maintain and does not entail mandatory court oversight.


Finally, to complete your estate planning documentation, you need a Will and / or a Trust. Are you aware that approximately 75% of the public does not have a Will in place? Many people believe that only the rich need Wills; but this is just not true.


If you cannot answer the following questions, then you should consider obtaining a Will.

  • Did you provide guardians for your children?
  • Who will control your children’s finances and to what age?
  • Is your estate taxable?
  • Are your personal representatives (executors) appropriate?
  • Are your beneficiary designations of retirement and insurance plans correct?
  • Is the beneficiary of the shareholder / partnership agreement correctly designated.

      When planning your Will, you need to give special consideration to deciding who will serve as your personal representative.  This person may have to attend to the closing or sale of your business and any issues related to it.  Will this person have sufficient knowledge, time and expertise to perform this function satisfactorily?  If you are a shareholder or partner, the issues of the settlement as it relates to the business may be less complicated providing that you have buy out or partnership agreements already in place.


A legally drawn Will can adequately provide for the administration of a simple estate. However, a Will requires the settlement of your estate to go through probate, which can tie up your assets in excess of nine months. By creating a Revocable Trust, you eliminate the probate process, allowing your assets to be distributed immediately to your beneficiaries and / or family at the time of your death. Also, in the event of a serious illness or injury, a Revocable Trust can protect your assets and ensure that funds are available to pay for your ongoing expenses and medical care.


In addition to the Revocable Trust, there are other types of Trusts i.e an Irrevocable Trust to protect your assets in situations involving Medicaid; Irrevocable Life Insurance Trusts are used to reduce federal estate taxes; and Supplemental Needs Trusts to provide for disabled loved ones.


      In addition to your estate plan, you may want to consider if you have proper insurance coverage.  There are many products to consider:

  • Life insurance to provide funds for mortgage, taxes, education expenses, or to maintain your family’s standard of living;
  • Disability insurance;
  • Long term care insurance on you and your spouse;
  • Excess liability insurance in case of unforeseen circumstances such as accidents. 

      It is equally important that you verify proper ownership and beneficiary designations on your insurance policies. 

      You need to make sure all your personal and business goals are attained.  Whatever you decide, it is important to consider the professionals most appropriate to assist you with those decisions whether it is a CPA, broker or attorney.

      Often the story is told of the busy shoemaker who doesn’t have time to repair his own children’s shoes. Rather, it isn’t that he didn’t have the time, but that he didn’t take the time to attend to his family’s needs.  The shoemaker didn’t put his own house in order.  Make sure that you are not like the shoemaker.  Give yourself and your family peace of mind and take care of you, your family and your business affairs now.  Don’t wait.

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