Spouse. Children. Business. Home. Stocks. As time goes on, your family and your business portfolio expands. With any changes to your life, you need to have a current and complete will. A lack of a will will cause hard decision making to family members after your death.
As a small business owner, you have not just your family to consider, but your employees and your business. Who will pay the mortgage? How will you send the children to college? Who will run the business? These questions need to be answered.
A will allows your family to prepare for life after your death. With the provisions you set out through your will, you can ensure that your family is taken care of. And, then there is your business. You have employees, assets, office space, and a product line that needs to be provided for. If your business is run by your spouse, the provisions you choose will differ than if you are the sole proprietor or have an outside partner.
How To Prepare a Will
First, some vocabulary words to remember:
- Testator -- person making the will
- Estate -- all assets left by you
- Beneficiaries -- any person inheriting anything from your estate
- Executors/Trustee -- person you select to carry out the instructions in your will
- Witness -- Two witnesses who can verify that the signature on the will is yours.
First, decide if you want to DIY the will or hire a lawyer. Most wills are straightforward, and can be created with the help of a will software program. A well-known software title for will making is Quicken WillMaker Plus.
Analyze what you need to accomplish with your will. Are your business assets complex? If you have a business and your assets for your business are still associated with your personal assets, you will need to seek the services of a lawyer.
Second, arm yourself with the tools you need to prepare a will. Start with research. Ask family, friends, and colleagues for recommendations for lawyers who specialize in wills. Your corporate attorney may be a trusted associate, but his skill set is corporate law, not family law. You need to choose a trustee, also called an executor. Your lawyer will help you decide who to choose. The trustee will see that your instructions set forth in the will are executed.
Third, look at what you are leaving behind.
Look at your family? Do you want to give a gift to a family member? Set up a trust for your children? Assign guardians for children under 18 or an older child with a disability? Choose burial over cremation?
Look at your assets. Decide which assets are personal and which business. For the personal assets, look at your portfolio. Do you have checking and savings accounts? Stocks? Bonds? 401(k)? Retirement accounts? Mortgage? Rental property? For your business assets, do you have business partners? Investors? Mortgage? Loans?
Look at your partners. Both your spouse and business partner will need to be consulted as you prepare your will.
What To Include
A will, whether prepared by you or an attorney, must include the following:
- Basic information -- name, address, and date you signed the will
- A sentence to the effect that this “is your last will and testament and supercedes all previous wills.”
- Include the name of the executor or trustee
- A sentence to the effect that you are give the executor “the power to manager your estate.”
- A sentence stating that the executor “should pay off all your debts and final expenses, including funeral expenses and taxes.”
- List the names of guardians for all minor (under 18) children.
- For any adult children with mental impairments, state guardianship or power of attorney relationships.
- An additional, but not required, sentence is one where you “forgive all debts owed to you.”
- After debts have been cleared/paid, show how all assets will be divided -- money, property, belongings. Be specific. Name a secondary beneficiary, in case the first dies before he can inherit.
- Give clear directions to division of assets, “To Kitty I leave my collection of thimbles,” “To Dan I leave my subscription to Thimble Monthly,” etc.
- Indicate clear instructions for division of property. If you own a rental property with your second cousin, who will you give your share to.
Without a will, many families have waged battle over who should get the deceased person’s assets. A will is a document, which sets out in writing your wishes. It is a legally binding document that your family must follow.