It is not what you are thinking. Could I be referring to a business plan? Perhaps, seeing as how I am an attorney you are expecting me to be advocating for you to form your business as an LLC or even an S-Corp. While all of those things are vitally important for an entrepreneur or business owner to have in place, I will not be mentioning those in this article.
What every Entrepreneur needs is… an Estate Plan.
I will wait while you gasp at the mere suggestion. Didn’t see that one coming, did you?
Now you are probably thinking, Estate Plans are for old people, I am perfectly healthy, I want to bury my head in the sand and not think about my own mortality, etc. All of which may be well and true.
However, without being to grim people don’t wake up in the morning and think they will be involved in a car accident, slip and fall on the sidewalk, or become injured or incapacitated while playing their favorite sport or recreational activity.
Yet it happens every day. Yes, shit happens and you need a plan.
Even if you are the super tech coder, who never leaves his house and has drones deliver his food you are still at risk. Guess what you are doing while reading this. You are likely sitting down and staring at a screen or a phone.
Unless of course, you are one of those rare birds who are reading this while working at a treadmill desk, in which case, good for you and I kinda hate you. Point being, just sitting is not only ruining your posture but also increases the likelihood of disease and possible early death. Smarter people than I at Harvard Health agree.
Additionally, virtually every entrepreneur is under tremendous stress. Whether you are just starting out or are a profitable business, stress will also get you if left unmitigated.
According to the National Institute of Mental Health, “Over time, continued strain on your body from routine stress may lead to serious health problems, such as heart disease, high blood pressure, diabetes, depression, anxiety disorder, and other illnesses.”
I think you know where I am going with this. Chronic stress is a killer, and if it gets you and you don’t have a plan then you are leaving your business and your family out to dry.
So now that we all agree that you are susceptible to death and therefore need an Estate Plan, lets briefly discuss some other practical reasons why this is beneficial for you as an entrepreneur.
Yes, even the budding entrepreneur who is sleeping in his car and eating Ramen has assets.
Well maybe not him…
However, most of you have assets, whether it is property, stock in your company, retirement plans and the like.
If you have a family, you do not want to put them through the Probate process. It is added stress put on your loved ones, who will be scrambling to recover while also coping with their loss.
Additionally, whether you are gone or just merely incapacitated, your business partners, family, or whoever else you would trust to make business decisions for you will be in a serious pickle. Essentially, they will be handcuffed by the court system until a judge can make a decision regarding the future of you business that you have worked so hard for.
However, if you had the trust holding your stock in the company, you could dictate who you would want to handle your affairs and even how you would want them handled. Coupled with a proper partnership agreement or Buy/Sell agreement drafted by a solid business attorney and you can sleep soundly knowing that your business and family will be well taken care of.
Even if you survive in the urban jungle or from sitting at a desk for 80 hours a week you may still need an Estate Plan. Why?
Well I am glad you asked. Predators. All sorts of predators like former employees, customers, creditors and their ilk who would love to sue you and your company out of existence. Ok, that was admittedly a bit glib. However, odds are someone will try and sue you personally as well as your business at some point during its existence. Sadly it is part of doing business.
However, with your assets in Trust, as well as a proper corporate structure you can largely shield your personal assets from liability. A good umbrella business insurance policy is also a must. I could write a whole separate article on this, and perhaps soon will. The point is as an entrepreneur you need to find a good Business Attorney as soon as possible and get your affairs in order…while you still have time.
Questions? Comments? I would love to hear from you in the comments section below!
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Disclaimer: This blog discusses general legal issues, but it does not constitute legal advice in any respect. No reader should act or refrain from acting on the basis of any information presented herein without seeking the advice of counsel in the relevant jurisdiction. Reading or relying on any such information found within this blog in no way, shape, or form creates or constitutes an Attorney-Client Relationship. The author and his firm expressly disclaim all liability in respect of any actions taken or not taken based on any contents of this letter.
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