By Tara K. Frame, Esq.
As the sole owner of your business, you have many responsibilities. From hiring and firing to administration work and maintaining your client relationships, your duties are as crucial to the survival of your company as they are varied. In the event that you have a medical emergency or you pass away, what is to become of your business and your family that depends on that revenue?
Few Small-Business Owners Are Safeguarding Themselves And Their Families Against The Unknown
According to a Bloomwell survey of 500 individuals, shared by Entrepreneur magazine in July 2017, 80 percent of entrepreneurs did not have a financial power of attorney, only 13 percent had a living trust, and just 24 percent had a will. This left the majority, 65 percent, with no estate plan in place at all, leaving their business in a very precarious place if anything were to happen to them. Considering that just over half of all Maryland employees work for small businesses, according to the Small Business Administration, this leaves hundreds of thousands of people in a dangerous situation as their jobs could vanish in the blink of an eye if the proper decisions are not quickly made in the event of the owner’s misfortune. Many people believe that they do not need an estate plan until they are getting close to the end of their life. This could not be further from the truth, particularly for business owners whose income is derived from the success of their store, restaurant, shop or firm.
Creating A Financial Power Of Attorney
In the event that you die or become incapacitated (unable to make decisions due to unconsciousness or any other serious medical condition), you need someone to quickly step in and take over your normal business proceedings. When most people become incapacitated, a family member will become a guardian, but this process is time-consuming. You cannot afford to wait weeks or months for a trusted family member or friend to become your legal guardian — thereby legally authorized to make business decisions for you. Moreover, a guardian is only bound to make decisions in your best interest, which is vague and does not specifically outline what you want to have happen and what needs to happen in terms of business decisions.
A power of attorney, also called durable power of attorney, is a legal document that names an “agent” to make decisions on your behalf. Your financial power of attorney gives specific instructions on what they can and cannot do. This agent can immediately step in and take over the day-to-day at your business, as well as make more important decisions when the time comes — all within the legal and binding scope of your wishes.
If Frame & Frame, Attorneys at Law can assist you or your family, contact Tara K. Frame at 410-255-0373.