Anyone who wants to protect their assets and family should have a packed emergency kit. Entrepreneurs, for example, have to make decisions every day that can have a high relevance for the future of the company. Therefore, the company’s ability to act should also be ensured in the event that the managing director or the owner suddenly falls ill or even dies.
The same applies to private assets. If the legal situation is not clearly clarified, disputes may arise between the heirs, making it difficult or permanently blocking sensible administration and distribution of the assets. This may already begin with the question of who has become the deceased’s heir in the first place. This question alone can lead to banks, for example, waiting until the conflict is resolved before disbursing liquid funds.
Such delays can last for months or, in the worst case, many years. Those who do not want this and prefer a clear and efficient arrangement should make provisions: with the right pension documents, the company’s ability to act can be ensured, private assets can be wisely protected and also transferred to the next generation in a fair and equitable manner. The responsible entrepreneur and asset owner should therefore ask himself:
Ho I have the most important private pension documents in place and are they up to date?
Key private pension documents include:
1. health care proxy for health and property matters
In a health care proxy, the entrepreneur should regulate who can represent him in both private and business matters if, for example, he is unable to take care of them due to illness or accident. This power of attorney can have effect beyond death.
The asset owner should have a review of what happens legally and fiscally if he or she dies without a succession plan in the will. If he does not like this result, it is advisable to draw up a will or a contract of inheritance. This could at least regulate the most important issues. If you estimate it as precisely and accurately as possible, you can refine your regulations in a second step. What is important, however, is that an inheritance-law arrangement is made in the first place, establishing clear guardrails and avoiding fruitless disputes.
It is particularly important for entrepreneurs to ensure that their own succession wishes match the inheritance law provisions in partnership agreements. If the will and the partnership agreement fall apart, a dispute is inevitable. The so-called “digital estate” must not be neglected either, i.e. clarification of the question of who has access to online presences and digital passwords in an emergency.
3. prenuptial agreement:
Who is not familiar with the question of what applies if the bond of marriage should not prove to be durable. A prenuptial agreement can, for example, stipulate whether an equalization of gains is to be carried out. This also applies to the question of whether company assets are to be included when determining the equalization of gains.
Anyone who does not want to be taken by surprise here and wants to protect their assets and in particular their company without foregoing tax advantages should think about a prenuptial agreement. It doesn’t have to be the so-called property regime swing. Even simple adjustments in the prenuptial agreement can help protect assets and ensure a fair solution. This may also include the settlement of alimony and pension equalization. This becomes particularly relevant if the business assets were built up during the marriage or have increased significantly in value. A high claim to equalization of gains can jeopardize the liquidity of a company.
With the so-called modified community of gains, it is possible in many cases to combine the advantages of community of gains for the tax-friendly and fair distribution of assets between both spouses with the protection of business assets.
4. living will
In the living will, each asset owner can make instructions for his or her medical treatment if he or she is not able to tell the doctors himself or herself. It often includes a statement as to whether the person requires artificial nutrition and ventilation, and whether he or she desires or rejects “machine medicine.” A living will can also be of great value to close relatives, as it can provide great help to all involved in an extraordinary situation.
Having an emergency kit “packed” and up to date can help protect his assets, the business, and therefore his family if something happens to him. What belongs in this emergency kit? A will and a health care power of attorney for health and property matters are important contents. But every asset owner should also think about a prenuptial agreement and a living will. Finally, it is also advisable to clarify whether and who should have access to the digital passwords and documents in an emergency. If such precautionary documents already exist, it is worth checking whether they still correspond to current circumstances and wishes. If such precautionary documents do not exist, consideration may be given to establishing them in the short term.
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