Most people recognise the importance of having a Will to determine how their estate is distributed when they pass. If you are self-employed, a partner or co-director, having a ‘Will’ or succession plan for your business is equally important.
Think about what may happen to your business when a key partner dies or is incapacitated. Generally, business partners are mutually dependent owner/ operators – each relying on the other/s for their skills, expertise and capital so the business can prosper.
The death or incapacity of a key player causes unprecedented interruption. The continuing partners need to fill a void and, unless funds are available to buy out the departing owner’s share, there is uncertainty over the future control and sustainability of the business.
Business disruption due to the death or terminal illness of a partner however, can be controlled through buy-sell insurance and an effective buy-sell agreement.