Is Your Executor Ready for Business?

“I did it. I finally got around to getting my will in place. I chose someone that I trust with my entire estate, which includes my business. How can I be sure they are prepared?”

What does good preparation mean?

Well, your executor’s primary responsibilities are to:

1.    Uphold your wishes as written in your will, and

2.    Preserve the estate until it can be distributed to beneficiaries

If there is a business in the estate and you, the owner, are still actively managing the business, your executor’s role just became much more complicated. Can the business continue without your involvement? If the answer is, “No”, you cannot procrastinate getting proper support in place!

Your Executor is not likely able to step in seamlessly. This is risky business!

PREPARE YOUR EXECUTOR:

1.     Prepare a “One Sheet” for the business

Include all important information about the business including insurance policies, names and contact information for advisors, bankers and lawyers. List all CRA account numbers, remittance schedule and location of corporate minute book. Include names of key employees (past or present) who can be called in to help run the business.

2.     Develop the Emergency Succession Plan

The executor needs to step into your shoes to keep the doors open, serve the customers, pay employees and keep the business viable. Often, one of the most immediate needs is access to online accounts. Where are the passwords and logins stored? Who can authorize payments? Where are the keys to office, store, warehouse, or equipment/vehicles?

3.     Put 1 and 2 in a safe place and tell your family and executor

In the good ol’ days, a safety deposit box was where all important documents were kept. Today, many online and cloud-based services exist that offer a digital vault for document storage.

Finally tell people you trust where these important items and documents are stored. When they need to find them, a scavenger hunt wastes precious time.

4.     Hold regular business meetings with family members, identified successors and executor

If there is a family or management successor identified, keep them involved with strategic priorities and planning. What have they learned? What role(s) are they now playing in the business? Have they been cross trained into other areas? Orientate family members to the business.

Include your executor in meetings at least annually so they keep abreast of business activity and the strategic initiatives. If this business can’t run without you, your executor becomes “You” when you are gone so let’s set them up for success! 

You may think that you’re going to live long enough to exit your business on your own terms. Do you want to gamble with your legacy?