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Value Creation Blog

Be Smart, Put Your Family First

Posted by Josh Patrick

family_firstOne of my requirements if you do business with me is we have an alignment meeting between you, your spouse and I.  I do this for a reason.  I want to find out how your spouse feels about your business.  I want to understand how much risk he or she thinks you’re taking.

Your spouse thinks you’re crazy.

This is true with my wife.  It’s also true with every spouse I’ve talked to in the private business world.

Most of the time the spouses I speak with think we’re all crazy.  They think we take risks that are out of control.  You can talk to you’re blue in the face and your spouse will still think you’re crazy.

Just accept it.  You’re spouse is convinced no matter how much money you have he or she thinks you’re about to go out of business tomorrow.

If you die, your business will probably also die.

One of the reasons that spouses probably think we’re all crazy is because they’ve known or heard about family businesses where the owner died.  They probably heard that shortly after the owner died the business ceased to exist.  Your spouse might even be asking, “will this happen to me if my husband or wife dies?”

Too often business owners tell me that if they die their spouses will just step in and take the business over.  They forget that it took them twenty years or more to build their business into a success.  What makes you think that your spouse is going to learn in a few weeks what it took you years to learn?

Why do you think it’s a good idea to insure your business?

When I review life insurance I almost always find a lot of insurance inside the business and just a little outside the business.  This is completely backwards.

Why is it you want to have your life insurance proceeds be accessible by your bank and all of your suppliers?  Do you think they’re more important than your family?  I’m really hoping the answer to both questions is no.

Instead think about having a whopping big insurance policy outside the business with your spouse as the beneficiary.  At least he or she will be able to live off the insurance proceeds if you die.  If they’re able to run the business, think about that as a bonus, not the main course.

Talk with your attorney about asset protection.

I want you and your spouse to go visit your attorney as fast as you can after reading this post.  I want you to talk about asset protection and how your spouse can make sure they aren’t going to worry about money if you happen to die.

Don’t put this off.  This is a big deal.  Talk about money and how your spouse is going to live if you’re not around.  It’s part of responsible planning and I know that you want to be responsible.

Include your spouse in the conversations.

The key here is to share information with your spouse.  I’ve never really been able to make fears go away.  At the same time with some knowledge you’re spouse will know what to do if you die and you still own your business.

A good rule of thumb is to treat your spouse the same way you would like to be treated if the shoe were on the other foot.  Both of you will be glad you did.

Report on the basics of estate planning

Topics: life insurance, estate planning, spouse

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