“I went into business with your spouse, not you!”
You’ve been in business with your good friend and close ally Mark for almost a decade, building a strong business together. You’ve survived the GFC, massive competition, and a couple of bad business decisions you’d rather forget. But you’ve both come through, and your business is stronger than ever. Along with your house, it’s one of your most valuable assets, and it’s what keeps the food on the table for both families.
You receive a call from Mark’s spouse, Angie, distraught. Mark suffered a fatal heart attack.
The funeral is desperately sad, as are the days and weeks after. You busy yourself finding a couple of employees competent to fill Mark’s numerous roles. They’re certainly not the perfect fit, but it’s just to get you through the silly season – to keep the wheels rolling.
Weeks pass, and things inevitably tighten up: Mark’s business acumen, salesmanship, and of course his friendship are sorely missed. You’re off your game too.
If this isn’t enough, Angie returns from a short break with family in Sydney, leaves a message wanting to catch up to ‘talk about the direction of the business, and cover off finances’. She’s got a plan, she says. You cannot believe it. She’s barely shown a passing interest in the business since you kicked off! She even admitted as much at the funeral.
But she owns half, and she wants a say. And an income.
Now you’ve got to explain how the business works, why it’s in a hole, and why you’d prefer her to stay away and let you get on with it. Without being offensive. And without inviting a costly fight.
Do you buy Angie out, do you watch the business slowly deteriorate because you cannot work together? Either way, it’s costly.
This could have been avoided. Clearly the bereaved will remain so, but the aggravation of dealing with a potentially hostile business partner in an unknown business can be avoided, if you plan ahead.
We all know preparing our will is vitally important.
But what about our business?
Often one of the biggest assets we can accumulate, people often overlook the importance of preserving its value in their overall estate planning.
Both your family and your remaining business partners will be looking for guidance and clarity, not headaches and cost.
Of course, a well drafted will is always required, and is a great start, but it won’t cover:
- Making sure your:
- spouse is not left with a business he or she knows nothing about, and
- business partner isn’t left dealing with your family on your death,
- family is adequately and swiftly paid out for your interest in the business through, for instance the application of insurance proceeds in a tax effective manner;
- How market values of the parties’ business interests are to be determined; or
- How the parties can regulate the management and sale of a business partner’s interest in a business.
Our lawyers can work with you, your financial advisors and business partners to provide tailored solutions for your business, no matter whether you’re part of a company, partnership, a unit / family trust, or any mix of these. We can ensure that you have certainty in difficult times so that both your business and family interests are protected.