The importance of a will as an entrepreneur: how it protects your business and your loved ones

When starting a new business, many entrepreneurs don’t necessarily consider estate planning and writing a will as part of business planning.

However, once your business is up and running, it becomes an important part of securing the legacy of your business. In addition, it protects your loved ones and describes the plans of your participation in the business for your partners.

In a webinar sponsored by Absa, host and media entrepreneur Verashni Pillay unpacked this topic with two experts. Guests were Johan Barnard, Acting Director of Trusteeship and Enforcement of Absa Trust, and legal technology entrepreneur Sinal Govender.

Govender is the co-founder and legal manager of Life.File. The startup allows users to create, store and share legal files through a web application.

Barnard looked at tips and tools for business owners in regards to business owners – as well as the mistakes many entrepreneurs make.

He also gave the audience the introduction to trusts – the use cases to create them and why they shouldn’t be used as a tax avoidance mechanism.

Meanwhile, Govender also looked at some of the mistakes business owners make when it comes to succession planning. She stressed the importance of a shareholders’ agreement and presented some of the things entrepreneurs need to know about intellectual property.

Key points about the importance of wills for entrepreneurs and business owners

The webinar helped demystify some of the assumptions business owners and the general public make about wills and estates.

There are also the human traps that come with estate planning, like the assumption that we just don’t need a will.

“We forget that we are not immortal,” noted Govender. “And our death is going to impact both our family and our businesses. “

She highlighted how the availability of original documents, provision of services and other unforeseen delays can affect the liquidation of an estate, which can leave a business or family in crisis.

Barnard used his expertise to share some quick ideas on how trusts should be used by entrepreneurs and individuals.

“If used correctly, trusts still make great business sense from an estate planning standpoint and then they are used to house your assets and then obviously to build generational wealth,” Barnard said.

However, he stressed that trusts are not a tax avoidance mechanism.

“I always say it’s asset protection that needs to be highlighted, not tax avoidance. And I think if you understand this principle correctly, trust remains a fundamental tool. “

Barnard and Govender both explained some of the implications of marriage as a community of property, the consequences of not having shareholder agreements, and other important issues regarding estate planning.

To learn more about the panelists’ ideas, you can watch the webinar below:

Featured Image: Scott Graham / Unsplash

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