THE 1 IMPORTANT THING THAT BUSINESS OWNERS PREFER TO IGNORE

Dash

EPISODE 44

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ABOUT THE SHOW

Dash

It’s a contest between death and taxes as to which is least favourite but, as the old saying goes, they are the only two things that are absolutely certain in life. The reality is, while nobody likes to talk about Estate Planning and we put off doing any planning around it, NOT doing anything is only making things more difficult and traumatic for those we leave behind.

Today we talk about why it’s important to have your estate plan under control and the types of considerations you should have when doing so.

WHAT YOU'LL LEARN

Dash
  • Why Everybody Needs An Effective Estate Plan
  • The Importance Of A Well Documented Estate Plan
  • Why People Avoid Doing An Estate Plan 
  • The Effects Of Not Having An Estate Plan 

EPISODE TRANSCRIPT

Dash

Jason: You’re on Episode 44 of the Business Made Easy podcast. Let’s do this, Mia!
Mia: You’re on the Business Made Easy podcast where we make business, easy. Here’s
your host, Jason Skinner.
Jason: G’day, G’day and welcome to the Business Made Easy Podcast where we make
business easy. Jason here again for you. How are you doing?I hope all’s good up here in
the business land for you. Uh, it’s been fast-paced week here for me I tell you. I, I don’t
know where the days are going?I really don’t. I um, I know it’s start Monday and before
you know and it’s back to Monday again and uh, here we are again with another
episode and we’re up to episode number forty four. I think it is. It’s so forty four. Yes,
forty four which uh, is incredible really. I don’t know where the years actually going so
anyway it’s going so we’re uh, we’re all good.
And it’s probably a timely thing to talk about our episode today is, is probably a timely
topic. I’m going, I’m gonna talk to you about that in a second but before I do, if you have
any questions in um, in business or you’ve got any questions that are sort of nagging
you and you want some help with, feel free to uh, jump on to the website, go to the
Business Made Easy podcast dot com. There is a red record button there. You can hit
that red record button, ask a question and I will answer on the show. We’ve got some
listener questions coming up in the coming week but if you wanna — if you wanna jump
on board there and uh, have that nagging question answered so that you can get some,
some solid answers, feel free to hit that red record button on Business Made Easy
podcast dot com. I get a — I get that as an email and it comes in an, in an audio file and I
can play it and listen to the — listen to your questions. So love to hear from you
whatever you’re up to. We’ve getting some questions coming through. You can also ask
on email as well. So if you’ve got any questions that you want answered or you can just
send me an email and I’m more than happy to answer those as well. But thank you for
being here. Thank you to everyone who has written in so far and also for everyone
who’s been giving me some fantastic
(2:00)
reviews on iTunes. I’m amazed at just what I see; when I put this podcast together I
thought, “Geez, who’s gonna, who’s gonna listen but, but clearly people are listening
and enjoying the show. So I really appreciate you um, taking the time to uh, hit that
review button in iTunes and, and leaving me their honest review that’s really very much
appreciated. And I thank you so much for the listening in and really happy you’re
enjoying the content as well. And I hope you enjoyed today’s content although when I
tell you the topic, you’re probably gonna go, “Oh my God, why are we talking about
this?” And I apologize in advance but I tell you what? I wanna share with you a story as
to why we’re gonna talk about this topic and it’s — I, I come across this far too often in
business and when I’m advising business owners and it’s the topic of death and um, and
passing away.
So um, and I will just share with you a story, I-I had a client come to me recently and um,
her uh, partner had, had suddenly passed away and uh, quite quickly and um, he had
been ill but, but certainly, we weren’t expecting it as fast as it happened. And it dawned
on me as I was talking with her, just how traumatic — firstly, how traumatic that, that
particular um, situation is, for those, those people left behind but equally um, how, I
guess, how important it is for us as business owners to make sure we have all those
affairs in order. So we don’t leave our love ones with a, a, a burden or a problem when
we do pass away and if we just look at that for a moment, um, we, we don’t
unfortunately know when it is that we are going to pass away. We just don’t have —
none of us have that crystal ball or that magic date that um, that, that event’s going to
happen. So, you know, we all
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have the stories of people going outside one day and, and not coming on the next, you
know? It happens in life unfortunately and it’s a part of life. A significant part of life and
I, I feel as business owners and, and entrepreneurs that we have a responsibility to
make sure that we have all our affairs in order so we don’t leave those behind with
these problems. Uh, bigger problems in such an emotionally charged time and we’ll,
we’ll go over some of the scenarios that can happen but really um, if you think about it,
we enter into the business world of our own accord. We create these assets. We create
properties and buy properties and create uh, rental investments. Uh, we, we buy
shares. We sign up to social media. We, we, we in our life, make all these decisions as
we’re going along during the day and some of them are quite significant, you know?
Some of them are quite significant investments. Some of them, you know, some, some
businesses take on a lot of uh, debt with, with banks and things like that. Some people
have large communities of people that, that they, they build up. Large audiences that
they build up over, over the time and large customer base. Um, you may actually be in
partnership with another business owners. So you might be, you know, that’s even
more difficult. It’s not it’s your family that, that you’ve got to think about, It’s okay.
What happens to ah, the business or my business, if I pass away or my partner passes
away um, you know, what happens in that situation? And well, so the topic that we
don’t like to talk about, it really is, as, as you can see from those, those illustrations is
there, very, very important that we don’t leave our loved ones with the burden or a
liability in that significant uh, emotionally charged time because
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it’s so — you know, that the emotion that run, run as a — I mean, that this lady that I was
talking to the other day, had a terrible situation. And she’s just lost a husband and
we’re having to sit there and, and um, work through her affairs and, and puts some
strategy and some um, some — implement some, some action steps to make things
happen as smoothly as possible. And you know, um, in this situation, it turned out that
not everything was in order and we had to — you know, we had to make some extra
steps that, that could have uh — but thankfully, worked, have worked out and are
working out but could have gone the other way. And um, their, their state was quite
simple but there are situations where they’re very complicated families. The com — uh,
the families that are maybe mixed families from, from more than one marriage. Um,
might have children from other, from a previous uh, relationship. Uh, all these
considerations come in to play at the time of passing and, and what I wanna talk today
about is some of the things to consider and, and I, I guess urge you to take action to get
them sort — get your estate plan sorted out if you haven’t already done. So are you —
it’s been at the top of sort of not maybe at the top of mind but it’s been at the back of
your mind going,”I’m gonna do that one day. I really must — really must, um, take action
on that.” So today I really to encourage you to take that action. Book a — book a, uh, a
meeting with a, um, um, uh respectively qualified uh, professional to, to get that sorted
out and make sure that um, things are in order. So let’s just talk about some of the
things today that um, you probably haven’t thought of um, that do need to, to be, to be
taken into consideration. And the first thing we wanna look at is, basically, your, your
will and your estate plan. What that documents going to do, it doesn’t matter where
you are in the world, that document is going to be a legally
(8:00)
um, binding document that is going to guide um, what they call, the executors of your
estate so that, the, the trustees of your estate when you pass away, that, that document
is gonna guide those people as to what you want to happen with your assets. Now I’m
not going to get into the legal wranglings of this because I’m not a lawyer. I’m an
accountant and a business adviser but, and also to the laws do vary from state to state
and country to country so you do need an appropriately qualified legal person to, to
guide you through putting this document together. And I would encourage you to get
a-a-a-a-a legal professional help you with this that specializes in, in a estate planning so
that you — ah, they can point you in the direction of all the right ins and outs for the
laws of your, your region. But there are some things you can do to, to consider when
you, when you’re going in to see them, that I sort of wanna talk about and one that’s
probably not so not talked about um, is your um, your social media. Um, what do you
want to happen with your social media accounts? And what, uh, what social media
accounts in an assets have you — digital assets, have you got out there in the world that
uh, um, you know, for instance we’ve got a free Facebook group. Um, that’s not a plug
that’s just we do have a free Facebook group and, and um, you know, what happens to
that community if, if something would happen to me? Another consideration, is your
business. What is to happen to your business should you pass away? Now, there’s a,
there’s is a number of different things people like. Some, some families um, the more
traditional families etcetera, like the fam — the business to be passed down through the
generations of the family and that might be appropriate. Other, other businesses might
want to have the business um, because the children don’t have any interest in the
business or it’s practical for the — for the uh, beneficiaries of your state to run a
business. The business might be need to be sold. Well, how
(10:00)
is that to happen? What do you want to happen with your business should you pass
away? If you are in partnership with, with another business owner, you might want to
give them first right of refusal — or they might definitely want first right of refusal over
the, the, the purchase of the, the business should you pass away, from your estate. So
the business would be valued and then you uh, and that business partner would then
buy out your uh, pay the cash to your uh estate and then, and then your beneficiaries
would benefit from the sale proceeds and then you um, on the part — the existing
partner continues on with um, with running the business. That might be an option. Um,
you might, you know you might have several partners, all these needs to be considered.
Uh, make sure your estate, your uh, partners um, uh a state planning is in order as well
because you might end up with, you might end up being partnership with you know, his
beneficiaries of his estate which he might not necessarily uh, get along with or, or, um,
or want to be in business where should he pass, he or she pass away uh, before you. So
very, very important um, to, to have those considerations put in place before and as I
said, it’s various laws in jurisdictions and depending on your country and region so you
do need to talk to a professional ah, about that. But have a think about these issues so
that you know uh, when you go into that meeting um, that you — you know, what, what
is it that you’re going to talk about. And what I’ll do for you as well is I’ll put a bit of a
checklist on the, uh, website. So if you go to um, Business Made Easy podcast and it will
be um, episode forty or was it, Business Made Easy podcast episode forty four so
business made easy podcast dot com slash episode forty four, I will put a uh,
downloadable checklist there for you that you can — or some of the considerations
that, that you can sort of think
(12:00)
of when you um, when you go into, to have that meeting.Um, it won’t, won’t necessarily
cover everything ’cause it’s impossible to cover everything in every one’s personal
situations but it’s just a guide. A bit of a frame-work to get started on that, on that
process. One of the best state planning um, situations and case studies I saw was with
um, the person who passed away was extremely, extremely organized. So organized
that they had um, a um, a folder with every um, like a significant detail outlines step by
step by step what was to happen. So this is where my passwords are all kept. This, this
is where my — this is what I want to happen with my social media accounts. Um, this is
where all my bank accounts are located and what branches. This is where my will is
located. This is the lawyer that has my will. This is the, the accountant that I used. It
would be able to help me, help you with all my financial situations in my business
dealings. So list all those particular um, important references out so much so you can
even get to the detail of significant events that have happened as to why you have um,
come to the conclusions that you have with your will. Why you want your will give it up
the way it is? Um, those sort of things or so not legally binding, they do for, help form I
guess an opinion around why you’ve come to those conclusions and it helps the people
that are left behind to actually make and form decisions. So they can, they can um, um,
follow quite easily uh, what, uh, what it is that you want done and where everything is
located. Passwords to me are absolute classic one now with so many — and uh, and
actually, that happened in the situation, the case study that I was talking about early.
(14:00)
Um, the, the poor lady whose husband passed away, he had a laptop computer um,
with, with his password on it that she didn’t know. She didn’t know what the password
was. So you know, all the documents and things like that are located on the computer
but no one can get access to them and just adds to the frustration into the angst
standing anxiety uh, about where things are located and how to get them. So we do
really have a res — this res — you can say that we do really have this responsibility to
make sure that, that you know, the, the people that are left behind, uh, uh left not
traumatized but certainly stressed and you know, added stress, um, because at times
like this uh, and you’re dealing with financial matters with an emotional matters, it can
get so messy. And then you know, you might have family situations that just aren’t so
amicable, you know. Um, kids aren’t talking to kids and um, you know, parents are not
talking to children and grandparents etcetera and there’s division. Um, all those things
can really play a significant role and, and again, you need to have that all better done
and um, and under control from your point of view.
The other uh, big issue that I’d, I’d get you to consider uh, when making an estate plan
or putting your estate plan together is, be careful that you don’t leave a burden for
people behind you. Some, sometimes um, it can be quite common to, you know, you’ve
worked hard building your business up over the years, uh, it’s all going and going well
and you personally have this belief that you want to leave it to your children or, or your
next generation or someone in particular. Whoever you’re leaving that to, make sure
that, that is something that they actually do want. Um, I’ve seen a estate plans before
where, where basically the, the
(16:00)
children are left with a business that they have absolutely no interest in and absolutely
no idea how to run. And it can be, can be a problem, problematic because you know,
they’ve got this thing now that they have to deal with that they didn’t really want to or
didn’t really know how to. So have that consideration, when you’re, when you’re
putting your estate plan together, “Am I actually leaving this in the right place for the
right people and, and is it going to benefit them rather than hinder or be a liability to
them as well?” Some of the other uh, considerations um, just while I think about it, um,
when you’re putting your estate plan together, uh, I mentioned passwords, bank
accounts, um insurance policies, make sure that you have your insurances and things
up to date as well. If you’ve got life, life insurance or life cover, um, make sure people
know where to find all those documents as well. Any safe custody or uh, side keeping
documents. People know how to find those as well. One, one way you can tackle this
well, another idea around this is actually put a video together. You could actually — uh,
it might sound a bit morbid, I supposed, people might not like to see when you passed
away but um, or an audio recording. Something that’s, that’s really easy to do and quick
and easy to do. You can get your phone and just shoot a video and say “hi” um, and, and
uh, with this checklist I give you, these are the things that you know uh, I — this is how I
want things dealt with um, upon my passing. So, so more considerations there but it can
— I think it can save in the point that it really is important that we address it now while
we’re still and, and still alive and, and still uh, active and basically, I do think we think we
do have a responsibility as business owners and entrepreneurs to um, getting there
and, and I make sure those documents are sorted. And I can safely say and happily say
my documents are in order as well. Uh, I haven’t been through the process myself and it
yet, it’s, it’s not as painful as you, as you
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might first think, if you have been putting it off. If you’ve, if you’ve done an estate plan
sometime ago, too, that’s another important thing. Put on there, put — you should
schedule in sort of regular, um, regular checking system make sure it’s still a valid
document. In the case study that I mentioned early with this ladies, just passed away, a
couple of very important um, documents that um, for her, for the superannuation, um,
had lapse. The, the expiry date on them had lapse which added to the, to the problem
and the stress and cost now that um, that she has to go through because um, the
documents that she thought was in — were place had lapse because they had a, a
three-year time in it. So very, very important that you schedule regular updates of that.
Just check-ins to make sure everything still in order and everything still within its
prescribed time and, and, and, and in or, in the order that you want things as well. Um,
the last thing you want would be um, you know, all the assets of your new relationship
coming to your ex-spouse or something like that, you know? Your prized, your prized
car that you, you’ve worked so hard to buy. Um, or–or whatever assets it is that’s
important to you and, and uh, you — you — the only will that you have in place is your,
your old uh, will with your ex-partner. That wouldn’t be real uh, helpful at all. So uh,
we’d hope that don’t happen. So yeah, but you get my point. Check, check your, check
your wills and estate planning documents um, regularly. Um, when you do them
regularly, they didn’t have to be changes to, to the documents but they certainly do um,
you do wanna just make sure that yeah, they-they-they- are the instructions that you
actually want and it hasn’t been any new grandchildren or children brought into the —
into the family unit as well that may otherwise missed out. Another important
document or consideration uh, when you’re looking at your estate planning also is what
we called, um, in Australia we call it
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your um, enduring power of attorney. We also have uh, another document called, your
advanced health directive. Now those two documents are very, very important
because what they, they, they actually come into play if you haven’t actually passed
away. So um, the way an enduring power of attorney uh, works is that, is that basically
um, it’s, it’s allows somebody to make legally binding decisions on your behalf while
you’re still alive. So you might have a bad, a bad car accident or something like that and
um, or be on a life support um, or something, something um, tragic and terrible like that,
well, people need to be able to still make decisions around, uh, around your life. They
still need to be able to pay your bills on your behalf and, and we had a case study of that
very — actually it was a, um, a person very close to us that um, uh, her father um, ended
up on life support in the hospital and had no legally binding documents that allowed
her to make decisions on his behalf and she was the sole person, sole beneficiary to
make those decisions. And, and if you think about that, she’s stressed and traumatized
from a father being in that, in that situation and at the same time too, got the added
stress and worry about making medical decisions on, on his behalf ’cause he was in life
support. Do they turn the life support off? Do they, do they um, leave it on? I tell you
about that in a second how that planned out but also too, um, his bills need to be
paying. His rent needed to be paid, all those things but she could, she couldn’t legally
get access to his bank account because she didn’t have an enduring power of attorney
to be able to um, make those decisions and, and have that come into place. So really,
really important that you don’t only address what happens when you pass away but
you um, address legally with your, your uh, legal representative what
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um, documents need to be in place should you just be — oh, I think they call it in
“compos mentis” — which means basically you can’t make — you-you-you haven’t got
your, your wits[?] about you and you can’t make legally binding decisions. Your mental
condition is, is uh, out of control. So very, very important that you address that one as
well. Um, in, in the case of my uh, close friend that, that had that situation, uh with her
father um, the hospital was actually going to um, they’re encouraging her to turn the
life support off and she was just in absolute distress and didn’t know what he wanted to
happen or not. Whether she should or shouldn’t turn it off and as luck would have it,
um, a fresh doctor came and, and, and had a look at him the day before they were
actually going to turn the life support off and um, and said,”No, we just need to change
his medication.” I mean how close was that? And um, turns out he’s, he’s fine now. He’s
out of hospital and on his feet and, and full recovery you know? Just, there was only a
day in it and um, really, really alarming story and, and a story that really resonated with
me the importance of these documents and making sure all things are in place. So that,
in, in that situation an advanced health directive or some sort of document that
outlines what sort of uh, what things medically you want to happen. So if you are on a
life support system for more than this period of time, what do you want your
beneficiaries or your legal representatives to do? What decisions can they make on
your behalf? Um, whether you’re in support of organ donation or not or whatever. Um,
all those things are really, really important for you to get cleared about and get them
listed down while you’re still in, in um, good mental health and, and health and fit and
healthy and uh, fit as well. So um, there, you have it, it’s just a few considerations. Your,
your will, your estate plan, what happens with all these
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important assets that we are building? Um, your business, what happens with your
business and, and all those um, important documents? And then what happens um, if
you don’t actually pass away but you’re, you’re uh, incapable of making legally binding
decisions ’cause you’re on life support or in, in some sort of traumatic situation in
hospital uh, or a nursing home or wherever it is that you end up. And then uh, what sort
of health decisions do you actually want to happen because that is your — you know,
even little things like people don’t about it,”Do I wanna be cremated or do I want to be
uh, have a full burial? What type of funeral would I like to have? How is the funeral to
be paid for? Is another one that we don’t sort of consider. So all these things, the
decisions that people have to make if in the absence of any direction from you and they
all add to the weight of stress and strain and emotion and um, we don’t want that for
loved ones. I know I don’t want that for my loved ones and, and I don’t want that for
your loved ones either. That’s why, I thought it would be a really uh, was not joyous
episode uh to talk about but certainly um, I, I know that if you listen to this episode
today and it resonates with you and you take away action and you implement what
we’re talking about here and take action then I know for well, that your, the
beneficiaries and the, and the uh, the loved ones left behind should something happen
to you, are going to be really really, um, thankful for you and, and thankful for you
taking action uh, on these steps. So thanks so much um, for joining me. As I said, that’s
not a cherry topic and it’s certainly not one that you — I know that you’re not gonna
hang up uh, turn off the podcast and run down to the, to the local, uh, lawyers and start
saying, “Quick, give me a, a, a, give me a will but it certainly please them. I really
encourage you to make sure you take action. I see it all too often when action hasn’t
been taken and it really is an emotional
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messy time for those left behind you so. I’ll leave it at that. Uh, it’s been is great to talk
to you again on this episode of the podcast. Thanks so much for joining me and uh, if
you’ve got any questions that you would like answered on the show or there’s any
topics that you’d like covered in the show even if it’s of a — doesn’t even necessarily
need to be a question. You just might wanna have some some more information that
you know would make a big difference between or big game changer in your business
or help you out. Be sure to uh, drop me a line at Jason at Business Made Easy podcast
dot com. I will answer that question for you. I’ll play on the show and uh, I’ll even send
you a free Business Made Easy t-shirt for uh, for doing it as well. But thanks so much
again; I’ve lo-loved uh, chatting with you and uh, until next week, here’s to your success.
Take us out, Mia.
Mia: Thanks, Jason. You’ve been listening to the Business Made Easy podcast, where
we make business easy.

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