Don’t let your business die with you

Gary Weigh

Despite your best intentions, your business could die with you.  The asset you worked all your life to build for yourself and your family; your jewel in the family crown and your ultimate retirement asset, could be dashed against the rocks when you die.

Business succession is not a matter of whispering your deathbed instructions to your first born eldest child.  If you believe that, you watch too many Godfather movies.

Here is a brief outline of reality for the future of your business if you die whilst still the owner or a part owner.

  • Firstly, the beneficiary who inherits your business could be lacking any relevant knowledge and experience and could be the worst thing that ever happened to your business besides losing you.
  • Secondly, the beneficiary you choose in your Will might be happy doing other things and not the least bit interested in your business (despite what they say to your face).
  • Thirdly, any co-owners who survive you in the business are not going to be too pleased about suddenly being in business with a perfect stranger.  It was never their expectation that you would be replaced involuntarily by your spouse, friend or family member, who could turn out to be disinterested, lazy and / or inept (and yet still draw an income).
  • Lastly, and depending on the timing of your demise, the beneficiary you choose may inherit more debts than assets from you.  Your bank won’t care if you’re dead; they will still want their loans repaid; and upon your death, they will very likely want them repaid in full immediately.

Having no succession plan even for a simple business structure, is just plain dumb!

It is a much smarter decision to pre-arrange the passing on of your business and the repayment of any outstanding business debts in advance, while you are alive and well.

That way, your business goes to a good home at the right price without being a burden on spouse, friends or family.  Your family is looked after because they receive fair value upon your death from a pre-arranged sale.

For more reading about business planning Australia, read The First Rule of planning

Until next time!


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