Where there’s a will... So, where’s your will?

I’m referring to testamentary wills, not willpower.  A will is a legal document where the will maker (the “testator”) sets out what is to happen to his or her property after they die.  For example, who is get the money, the property, the assets. 

It used to be that a will had to be made precisely following certain requirements.  While in my view it’s a safer bet to have your will formally and professionally prepared, the law has caught up with alternate and more modern ways a will can be made.  I’ve briefly referred to this here.

But what happens to you will after it’s made?  Most, though not all, will makers who've made their will using a solicitor, have their solicitor store their original will on their behalf.  Most solicitors don’t charge for this service.  Some store the original of their will in a bank safety deposit box, although I’ve seen a steep decline in this, and I understand most banks now charge for this service.  And others keep them at home, sometimes in a safe, but often just “with their other papers”.

I just want to focus on the importance of ensuring you simply know where your will is, and to confirm that from time to time.

A client couple recently explained their wills, made at the same time over 10 years’ ago, was stored at their then solicitors’ office.  They had photocopies.  On their behalf and at their request, I asked for those wills to be sent to me.  I only received one!  In a follow up inquiry to the sender’s office, they insisted they only ever had the one copy and have no record of ever having the other. 

My clients were puzzled, as like many married couples, they made their wills at the same time, signed them at the same solicitors’ office at the same time, and were given the photocopies they now have.  This anomaly was quickly fixed by making a new will to replace the missing one.

This situation could’ve been worse had the missing will been required following the death of the will maker.

These clients’ experience got me thinking.  I suggest that if you have a will (and every adult should have one) not only do you keep a record of where the original is, but to regularly audit it to check that it’s there.  Whether it be in your office, bottom drawer (not ideal!), bank, trustee or solicitor’s office, check that it’s there.  I’d suggest every 2 years is probably reasonably regular.  I wouldn’t mind if my clients were to check and confirm that I still hold their wills.  Every two years is also the same period I suggest to most of my will clients is a good time to review their wills to ensure their wills still contain their intentions.

Oh, by the way.  I also suggest you should always let your executors know (of course, you’ve already let them know that you’ve so appointed them, haven’t you?) how they can retrieve your will for when that time comes.

Friends in business, should be friends "in deed"...

Mark Bouris, executive chairman of a wealth-management company and small business adviser, but probably more recently widely known as the host of last year's TV’s Celebrity Apprentice Australia also writes articles in the small business section of the Sydney Morning Herald (well, I don’t really know if he actually writes it or whether he instructs another writer to do it for him, but that’s besides the point!).  Today he gives some advice to someone looking at starting a business together with a friend.

Mark gives sound advice about starting or running a business with a friend.  These include the need to (this list isn’t exhaustive):

• separate business from pleasure;
• create a plan and sticking to it;
• not letting personal relationships get in the way of professional goals.

He also makes another important point that I particularly emphasise when I’m advising friends who consult me when they’re starting a business venture: 

 

      put it in writing!

 

As Mark says, Contracts and agreements made between friends can be awkward but they are vital.  It may be awkward but the best time to negotiate and agree on the required documents, normally a deed, is right at the beginning while you’re still friends!  It could apply to partnership agreements, shareholder agreements, and  trust deeds.

People and friends don’t start business on the basis they expect to have a falling out.  If something should go wrong, even if the friendship is stretched or falters, at least there’s a roadmap, or a set of pre-agreed rules on how to best deal with the issue, or even end the business relationship.

A quick example.  If two people enter into a business partnership, if there’s no express agreement stating otherwise, in NSW that business relationship is governed by the Partnership Act.

Under that Act, in the absence of a prior agreement, a partner can dissolve the partnership by just giving formal Notice to the other partner(s) and the dissolution of the partnership is effective from the date that Notice is communicated. 

This is quite serious; think about it.  You’re in a partnership business, you’re handed a Notice and it’s over.  No lead in time, no time to work-out any buyout or secure finance, maybe no time to secure the firm’s bank accounts.  There’s great potential for arguments as who’s to get what plant and equipment, or who gets to “keep” which customers or clients.

I’ve seen this happen far too often.  It creates havoc, stress and ultimately costs that could’ve otherwise been avoided.

A typical formal partnership agreement, on the other hand provides a for minimum notice period, be it 3, 6 or even 12 months.  In other words, there’s a sound exit strategy already in place.

Of course friends can go into business together; they should however treat it as such and remember that business is business.