Imagine this…
You have worked hard establishing a wrap business for the past year and have built a team of people to assist you. You have several wrapped properties and all your clients are happy with their win-win situation.
On your way home from an inspection, you are involved in an accident and either die or seriously disabled. How will this affect your wrap business, your clients. As you are the director of your business and have obtained several loans from banks, how will the banks treat your wrap deals – will they expect to be paid out for the loans? How will this affect your clients? etc. etc.
Ok maybe this is an extreme situation – but it could happen. How do we address this problem so it does not leave a mess for others (bankers, solicitors, family to sort out)
I know if we are dead we are not going to care, but i do not want to leave behind a mess for others to sort out.
Steve and other experienced wrappers – please advise on what you have done to overcome this hurdle.
Scott
Hi Scott
Ensure that you have sufficient insurance to cover mortgages. There are all sorts of insurances available some even pay out if you become incapacitated.
Andreas
Andreas,
Thank you for your response. Okay that might clear up the debt and repay the banks back, but what will happen if there is no longer anyone left to run the business?? For some of the larger wrappers it may be ok as they employ staff, but what are some of the smaller wrappers doing who do not have any staff?
Scott
The issue you bring up is not only an issue for wraps, it is with every business and every individual whether they have investments or not.
When someone dies, their affairs need to be “cleaned up”.
Personally, I keep my wife (and other close people) in the picture so she knows enough to be able to keep things moving after I’m gone. I also have a large life insurance payout to pay off debts on properties and be able to employ someone if necessary.
It is imperative that you spend time updating your records.
I know of one person who actually keeps a “death folder” which has details on bank accounts, life insurance policies, super funds etc.
Finally, this highlights to me the need to have a team as opposed to going it alone.
Dave
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