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You get an oil change every three months to protect your car. You get a check-up every year to protect your health. You file your taxes every year to prevent issues with the IRS. But what are you doing to protect your family and your business when you will not be around to protect them yourself?
In the event of an unexpected death or tragedy, what can you do to make this time easier for those you leave behind? Create a crash card. The crash card contains and communicates all the information your family and business successors need in order to move forward with your estate and business. It lists the contact information for your trusted advisors, locations of important papers and login information for your accounts.
None of us want to think about preparing for the end of our own lives. It is sad, complicated and scary. However, if we avoid taking the time to properly prepare for this eventuality, we leave our family members and business successors in a difficult position at a stage when they are feeling emotional. Recently we helped a family manage the estate of a loved one who passed away. They almost missed out on a significant amount of insurance proceeds because none of the family members were aware of the policy and no documents were found with the other financial paperwork. Fortunately, when going through the client’s checkbook, it was discovered that the client had been making quarterly payments to a life insurance company. The family received the benefits, but they easily could have missed this asset.
In a family business situation, we recommend annual family meetings, a sort of a state of the union address that includes all family members, even those not involved with the business. During this meeting, the location of the crash card should be communicated to the family along with a high level understanding of the succession plan.
All family members should have a personal crash card that includes all the information listed above as well as any additional personal accounts, including mortgage papers, credit cards and auto titles.
More than one person should know the location of your crash card. Many clients choose to store a copy in a safety deposit box or an in-house safe and have a trusted advisor hold onto the originals. Typically an attorney would hold this document along with the corporate record book, will, trust and other estate documents.
The crash card is not a one-and-done deal. It is a living, breathing document. It should be reviewed and revised once a year or at least every two years. We live in an accelerated, changing world in which your vendors, their contact information and your account access information changes frequently. An outdated crash card does not provide your survivors with the assistance and comfort that is intended.
Thinking about an event that leaves your family and business successors to manage your estate is likely not at the top of your list of things to do for the day. We have a story that may help you prioritize.
We were sad to learn that a well-loved client passed away unexpectedly. He had a number of companies where many people were involved, which could have easily increased the difficulty of this situation for his survivors. However, because he had a succession plan with all the relevant succession documents: wills, trusts, shareholder agreements and operating agreements in place, his survivors could focus on dealing with losing him and on managing damage control for the business. While the ripple effect of losing this entrepreneurial and generous man will be felt forever, the enterprise he left is well-managed and well-executed. And it is all because he communicated with his survivors about the location of the information they would need to move forward in the event of his absence.
Let us help you stay on a path that ensures your survivors are also in as positive of a position as possible someday. Contact us today to start the process of developing your crash cards and succession planning documents.