This is not a cheery subject, but it is an important one. A few things recently got me thinking about what happens to a business, including intellectual property, domain names and other business assets, when the owner dies.
After the musician Prince passed away, I was surprised to learn two things. One, he was directly involved in negotiating terms regarding licensing any of his work. The Wall Street Journal reported that Prince himself negotiated with streaming services and others about how his music would be made available because he wanted to have complete control over how his work was used.
That made the second revelation even more amazing: Prince apparently died without a will. He did not have a spouse or surviving children. Prince did have a sister and at least four surviving half-siblings. Without a will, there could be a years-long court battle over control of the estate. Expect long-lost relatives to come out of the woodwork to get what they believe to be their rightful share of the estate.
Prince’s music is part of that estate. It could be awarded to one person or ownership could be shared among many. Do you think that five or more people will agree on exactly what should be done with his song catalog? Or that they will all want to do things the way Prince would have? Not bloody likely.
In another case, a person who was not as famous as Prince but had a successful business and significant online presence passed away. When I recently checked her website, it no longer existed. The domain name is still registered to her, but the site is gone. Although not as valuable as Prince’s catalog, her intellectual property (e.g., websites, books, audio and video programs, etc.) has value. Maybe it has been sold to someone who is deciding what to do with it. Or maybe the executor of her estate is trying to figure out what to do. In any case, an established website disappeared and that damages the value of the estate.
What will happen to your business when you die? I know you don’t want to think about this, but we all will die. We hope it will be a long time from now, but it will happen. Who will get control of your business? Will they know what to do? Will they be able to keep the business going, or will they run it into the ground?
Here are some things you should do to make sure that all of your hard work builds a legacy for your heirs and it is not all lost when you pass away.
HAVE A WILL! Every adult needs to have a will. Without one, you do not know what is going to happen to any of your property. Or to your minor children, if you have any. Your will can pass all of your property to one person, split it among several in shares, or make specific bequests.
Even before you die you may be unable to run your business. You may suffer an accident or illness that makes you unable to manage your affairs, temporarily or permanently. Make provisions for someone to step in and take care of things until you are able to resume your duties.
Make a business notebook. It can be a paper notebook or file, or an electronic document. Just make sure that whoever needs it will be able to access it. Include information about your bank accounts, online accounts and access information (URLs, log ins and passwords), where important documents are stored, etc.
My friend, Barb Asselin, has created a template for her publishing business that tells her family everything they would need to know to keep her business going if she were unable to do do. It is specific to her publishing business, but it is a great start for anyone who has a business, especially an online business. You can download a free copy of her template here.
If you have bills (e.g., webhosting, subscriptions, utilities, etc.) that are paid automatically, those payments will stop when the account used to pay them is frozen or closed. Make sure the person managing your estate knows to pay those bills so domain names and other assets are not lost due to non-payment.
Do you have friends and colleagues who could help? Chances are, your family members do not know as much as you do about running a business. Perhaps you have some friends with similar businesses who would be willing to step in and help out.
Talk to the person or persons who will be responsible for your estate. Tell them what they will need to know about managing your business. The fact that you are leaving this responsibility to them should not come as a surprise.
Listen to that person, too. Do they want to manage your business? They may not have the interest or the aptitude to run your business effectively. Maybe you need to think about how they could sell it or just wind things down and close it up.
Depending on the size and complexity of your business and your overall estate, you may need to get assistance from estate planning professionals to make all of this work. (Keep in mind that some professionals will insist on solutions that make more money for them. Find someone you can trust, and get more than one opinion.) Anyone, though, can do the basics of writing down where everything is and what needs to be done to keep everything going.
This is not a subject most of us like to think about. However, it is important to plan if you want to preserve the business you have built for the benefit of your heirs and your customers.