How to Protect Your Family When You and Your Spouse Work in the Same Business
You and your spouse live together, you work together, and chances are you spend a lot of your free time together. Having a successful marriage and business takes a lot of hard work and dedication but can also be among the most rewarding things in life. To help keep you on the right track, here are a few tips.
- Create a budget for your family and your business. Money can be a very tense topic even for the average married couple. With a family and a business to run, it is important for the two of you to sit down and agree upon a budget for your family, as well as a budget for your business. By having open and honest communications about your finances, both personally and professionally, you can stave off more heated conversations later.
- Keep work at work. While your business is probably the main source of your income, it is important to create a boundary between your work lives and your home lives. If your business has a physical location outside of your home, this can be accomplished by establishing a rule that you and your spouse will only discuss business while you are at work. If you and your spouse are running a home-based business, you can establish “business hours,” and any time outside of those hours is personal time when business will not be discussed. No matter which approach you use, it is important that you allocate enough time to accomplish your work.
- Have your own hobby. Because you probably spend almost every waking moment together, it is important to take time to do something that you enjoy alone. This can be as simple as carving out time to take a long relaxing bath or joining an indoor soccer team. Having your own hobby allows you to access another part of yourself and take a break from the usual routine. Studies have also shown that individuals who have hobbies they enjoy tend to have lower blood pressure, are less stressed, and are overall happier.
- Have your estate planning prepared or reviewed. Just like any other couple, estate planning is important for business-owning spouses in order to protect each other and ensure a future that is financially stable and prosperous for the family and loved ones you leave behind. When a couple works in a business together, things can become even more complicated, making proper estate planning an even greater necessity. Below are some of the basic estate planning tools you need to protect yourself, your family, and your business.
- Trust: By having a trust, you are able to have your money, property, and your business owned by an entity other than yourself. While this may seem scary, in most circumstances, transferring the ownership does not mean that you are giving up control. In creating the trust, you can name yourself as the trustee (the one in charge of managing the money and property, including the business, in the trust) and name yourself as the current beneficiary (the person who gets the enjoyment from the money, property, and business). The major benefit of having the trust own your money, property, and business is that when you die, you do not own any of these things (the trust does), and therefore, they do not have to go through probate court proceedings. This will save your family time and money, and can keep your personal affairs private.
In addition to avoiding probate, a trust can give you a place to write down your instructions for the future of the business. Who will run the business if you are unable to or if you die? Is the next generation ready to step up and run the business? Will everyone participate in the business, or does money need to be provided to a beneficiary who does not work in the business?
Lastly, a trust offers additional protection for your business by allowing you to select an individual to run the business if you are unable to make decisions for yourself, thereby allowing for the continuous operation of your business.
- Financial Power of Attorney: By default, no one (not even your spouse) can make decisions for you unless you formally select someone (through the creation of a financial power of attorney), or if you do not make this choice yourself, someone is selected by the probate court in a very public and costly proceeding. Although your spouse may be the best positioned person to make decisions about you and your business, he or she needs the appropriate authority to do so. Executing a financial power of attorney can facilitate a smooth transition during a stressful and emotional time if, for some reason, you are unable to make decisions for yourself.
This document is incredibly important if only one of you is the legal owner of the business. Although the other spouse may be intimately familiar with the operations, without the proper authority, he or she cannot make any decisions that may be necessary to keep the business going.
- Medical Power of Attorney: As is the case with financial matters, no one has the authority to make medical decisions for you unless you select them or they are appointed by the court. If you are unable to communicate your wishes when an emergency arises, it is important that the person who will be deciding your course of treatment is someone you can trust.
Having a successful marriage and business takes hard work. We are here to assist you in making sure that your family and business are protected in the event that unforeseen circumstances befall your family. Give us a call today to schedule an appointment.