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AS A SOLE PROPRIETOR, YOU ARE INDISPENSABLE
 When you die:
- Your business loses its key person
- Your family's income source disappears
- You estate is responsible for all business liabilities
- Creditors press for immediate payment and "accounts receivable" are often uncollectable
- Your executor or administrator, in the absence of specific instructions, may be forced to sell the business to conserve your estate
Your family would face three alternatives:
1. Continue the business, if you provided for it in your will. Would your heirs:
- Have the ability and experience?
- Have sufficient cash after debts are paid?
- Be able to obtain adequate credit?
- Be able to retain your customers?
2. Liquidate
- A forced sale attracts bargain-hunters
- With "goodwill" gone, value of the business is drastically reduced (40% to 90%)
3. Sell as a going concern
- Finding a qualified, interested buyer may be difficult
- Cash for purchase may not be readily available
- Agreement on a price fair to all parties may be difficult to reach
There is a Better Solution!
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Include provisions in your will for the business to continue pending settlement of the estate, the executor to be relieved of personal liability in the interim operation of the business. |
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Provide sufficient business life insurance to carry out your plans for disposition of the business, whatever they may be.
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Purchase personal disability insurance to provide an income in the event of your disability. |
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