The Deceased Estate

What Happens to Your Business When You Pass Away?

There is a saying that goes “nothing is certain but death and taxes” and while it is true that death is inevitable for all of us, it sometimes comes when we least expect it to. 

Being a business owner with a family to care for adds extra pressure in the form of figuring out what to do in the event of your death. The most devastating thing that could happen is that your business dies with you, leaving your family destitute after all the years and hard work you spent growing it for them. It’s a dreadful contemplation!

As sobering as all this is, we are here to point you in the right direction so you can get the legal advice you need to make sure everything runs smoothly after you pass away. 

There is a saying that goes “nothing is certain but death and taxes” and while it is true that death is inevitable for all of us, it sometimes comes when we least expect it to.

Be Prepared is Always a Good Motto!

The first document that you need to have in order is a last will and testament that has a detailed list of what will happen to your business and property when you pass away.

This document can be drawn up by an attorney of law, a certified bank official or it can be completed using one of many templates available online. The important part is that you have your last will and testament certified by a legal entity in order for it to be valid in a court of law.

Another important aspect to have in place for the future of your business and your family's well-being is the appointment of power-of-attorney to a trusted family member. You will also need to have an executor of the estate who will ensure that all outstanding debts and liabilities are dealt with. An executor of the estate does not have to be a lawyer, but it should simply be a trusted person in your life. Oftentimes, close family members are assigned the role of executor because they have the interests of your family at heart. Decide on someone who you feel would put your business and your family first while ensuring that they are complying with legal requirements.

Once all the documentation is drawn up and finalised, make sure you place it in a secure place where it can be found when you pass on. There's no use in having all documents lined up and no-one can get hold of them when they need them.

Your Business

Once you have your personal life under control you also need a plan of action for your business.

Not many small business owners have a trusted business partner who can take the reins in the event of their unexpected death, so what options are there? Will your business be shut down after you pass away? Would your children know what to do in the event of your death? Will your spouse be able to continue running your business on your behalf? This is why your last will and testament is so important for the future of your business and family. You can specify all of your final requests in this one document, and ensure that your wishes are legally binding. 

Legal experts suggest including a provision in a memorandum of incorporation which specifies who will be responsible for running the business after your death. This will go hand in hand with your updated last will and testament. The importance of knowing these things in advance is you can now start looking for, and grooming, the person you would like to take over the business on your passing.

Generation Gap

Another great way to make sure that your business continues for generations to come is to invest in the future. By this, we mean prioritising sending your children on business management courses to prepare them for taking over the family business when the time is right. In this country, we are spoilt for choice with courses on offer for the aspiring business mogul in your family. 

There is a range of business schools to choose from with a variety of different certificates and diplomas available. Boston Business College and Damelin are just two affordable and accredited schools that offer distance learning, full time and part time courses that everyone could benefit from. 

For more information Clientele Legal offers cost effective legal advice and services at a reasonable starting price of R130 per month. Contact them through their website: www.clientele.co.za or by phone: 011 320 3000.