Business owners: You’re not immortal – start planning ahead

Greg Thompson
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You know you can’t work forever – and you certainly aren’t immortal. But plenty of business owners are living as though they’re completely infallible.

Those in their sixties and beyond are running their businesses and their lives like they’ll never fall ill or pass away.

I can understand the temptation to avoid thinking about decline, illness, and death. These are tough conversations to have with yourself and the people you love. But pretending it won’t happen, or believing you’re made of Teflon, can lead to enormous problems.

Don’t wait for the inevitable health scare

It’s amazing how many people in their 60s feel as though they can work forever. Unfortunately, it often takes a health scare to make them realise this isn’t realistic. Our bodies aren’t as resilient as they use to be.

For some it’s an accident – it takes no time to recover from a broken ankle when you’re 25, but it’s a different story when you’re 65. Illness like a heart attack for instance, or a stroke, which is the leading cause of serious adult disability in New Zealand, can strike at any time. 

If you are not well enough to make your own decisions, hopefully you have enduring powers of attorney (EPAs) in place to allow the people you trust to make decisions for you. Without EPAs, your family will need to apply to the High Court for authority to act. This is stressful, time-consuming and leads to problems piling up in the meantime. Plus, the person in your family given authority to make decisions for you might not be the person you would have picked. Will they know how to run your business, and manage your personal affairs?

For example, someone – let’s call her Susan - has assets in completely outdated ownership structures that are no longer fit for purpose and not updated to account for previous relationships. Susan’s sizeable business relied entirely on her guidance. Her trust still includes her ex-husband and their children as beneficiaries as they never formalised a financial separation, they just divorced and married again.  But the trust doesn’t include her new husband or dependents. A health scare made Susan rethink all of these factors and sort out the business. First she appointed a general manager for her business, but still has to sort out her trust.  What would have happened if she had died or become mentally incapacitated?

Don’t wait for a health scare that could leave you unable to sort out your affairs. 

Disorganised estates tear families apart

When people die without having organised their estate, it can create major family disputes that lead to permanently broken relationships and the horrendous financial burden of sorting it out. You’ll see headlines about court cases, and for every family that turns up in the news, there are thousands more where estates have torn people apart.

Our lives are often multifaceted. A person in their sixties might be a business owner, a co-business owner, a landlord, a parent, a grandparent, an ex-spouse, a second spouse, a step-parent, a step-grandparent – any combination of the above and more. And, with the advent of services like, it’s becoming more common for an unexpected adult child to pop up and claim rights after the surprise results of a DNA test. The more complex your relationships, the more important it is to have your affairs in order. Otherwise, the risk is your death creates irreparable rifts between family members and friends, and a financial burden to sort it out.

I’ve have seen this time and again through my work with clients. Some people simply refuse to consider their own mortality. Some are so determined to avoid any difficult conversations they’re willing to let their family argue about it later. In one case, an older businessman told me, “They can have the fight when I’m not here to be involved.” But the acrimony started before he died, and it was too late for him to legally enact his wishes once he realised what was happening. That case will be going to court, the broken relationships may never be healed,  and the only winners will be the lawyers.

This might seem extreme, but once you open up to people about an estate dispute, you realise that nearly everyone has a similar story. Laws on will disputes are currently under review, and one reason is that “many of the most contentious court cases involve claims of adult offspring who are not under 25, not disabled, and not in acute financial need”, as barrister Malcolm Wallace wrote last year.

If you’re over 60, it’s time for some soul-searching

As you start to approach retirement age, it’s time to do some soul-searching.

I like to start with this question: “How many useful years do you think you have left?” If you’re aged over 60, you might say 10, or maybe you think it’s 15 years. Then I ask about what you want to do during those years. You might say travel; that’s the most popular answer. You probably want to spend time with your family. Maybe walk the Abel Tasman or take the grandkids to Disneyland.

Do you plan to wait until you’re 75 to do these things? Will you really spend another decade flogging yourself in your business, putting off these experiences until you may not be healthy enough to fully participate in them? At what point will you no longer want to, or be able to, take long-haul flights?

Of course everyone hopes you remain well and healthy for many years. But what about the ‘red bus’ scenario, where something sidelines you out of nowhere? There are no guarantees in life.

You need a succession plan in place for your business. Your assets must be owned in a way that lines up with your legacy plans, and the same goes for your trusts. You need to have your will and your EPAs in place and up to date.

Implementing this change, in my experience, takes around three years by the time you work out what you want, consult with family, formalise your succession plan, and make the necessary legal changes to structures and documentation.  So if you are over 60, now is the time to start. It’s not as scary as it sounds. The first step is thinking about what you want your future to look like, and that often means stepping back and improving your quality of life. Isn’t it time to have a bit of fun after working hard all your life?

Avoiding difficult conversations feels like the easy path. But it only makes them worse for those around you and who you leave behind. How would you feel if a significant health event or your death was remembered as the point at which the family fell apart? That your financial legacy was dissipated through no-one being able to run your business, or legal fees to sort out matters which should have been addressed? I don’t imagine that’s the legacy you want to leave. Start the process of sorting it out now, and your legacy can be a positive one, that hopefully brings the family together instead of tearing them apart.