Law in the Marketplace: Planning for death and disability – Part II – Concord Monitor

In last week’s column, I argued that all of us who have spouses, children or other successors have a major duty to them to plan comprehensively for the possibility that, suddenly and unexpectedly, we will die or become disabled; I argued that to do this planning, we must draft a comprehensive planning memo for our successors that addresses 32 key issues; and I discussed the first eight of these issues. Below are my discussions of issues nine through 20.

9. Your employer. If you work as an employee for any individual or entity, you should ascertain from your employer the employment consequences if you become disabled or die; you should summarize these consequences in your planning memo; and you should advise your successors to notify your employer about your disability or death as soon as it occurs.

10. Social Security Death Benefits. You should determine whether any of your successors will be entitled to Social Security benefits upon your disability or death. If they are, you should advise them in your planning memo, and you should tell them how to expedite receiving them. To accomplish all this, you may have to consult with your tax professional if you have one or with a Social Security benefits expert.

In addition, there may well be a Social Security Administration office in your town, and it may be useful for your successors to visit that office. However, your successors may want to start their work with that office by calling 1-800-772-1213 (a general Social Security Administration telephone number).

11. Issues if you own your own business. If you own your own business, you should advise your successors about issues relating to your business that they or colleagues of yours may have to handle upon your disability or death. These may include issues with your suppliers, any employees and independent contractors who work for you, and your customers and clients. In this connection, you should consider keeping on your desk or Scotch-taping to a wall beside your desk a list of current business contacts whom your successors should notify upon your disability or death and their contact information.

12. Life and disability insurance. You should advise your successors about any life insurance or disability insurance you may have, and you should advise them to contact these insurers as soon as possible after you become disabled or die. If you lack life or disability insurance, you should consult with insurance professionals to see if you qualify.

13. Veterans’ benefits. If you are a veteran, you should advise your successors about any veterans’ benefits potentially available to you or to them upon your disability or death.

14. Investments. You should advise your successors about all investments you may have in stocks, bonds or other valuable assets, and you should advise them as to what they should do to dispose of these assets or otherwise to handle them upon your disability or death.

15. Business income and expenses. You should inform your successors about your current and reasonably foreseeable monthly and annual business income and expenses. More specifically, you should advise them about the net income for you and them that will cease if you become disabled or die.

16. Passwords. You should provide your successors with a comprehensive list of your computer internet passwords and with any other passwords you use in your family or business activities that may be important to your successors. If you do your personal or business banking online, it will be particularly important for you to advise your successors of the passwords you use in this banking and how to access bank statements and other bank data online.

17. Terminations of non-business memberships, etc. You should identify all clubs, internet groups (such as groups that meet regularly via Zoom) and other non-business organizations of which you are a member, and you should make sure that your successors know how to terminate these memberships.

18. Business organizations; single-member LLCs. If you are a member of a single-member or multi-member LLC or of any other type of single-owner or multi-owner business organization, such as a multi-shareholder corporation, you should advise your successors of any rights to which, if you become disabled or die, they may be entitled under any current inter-owner agreements of these organizations to which you are a party, and you should provide your successors with copies of these agreements.

In addition, if you are not a party to any such agreements but if your successors have rights upon your disability or death under governing business statutes, such as the Revised New Hampshire Limited Liability Company Act, you should so advise your successors. However, in order to provide this advice to them accurately, you may have to ask the help of a business lawyer.

Many readers of this column are the members of single-member LLCs. If your single-member LLC lacks a written operating agreement, you should hire a lawyer to draft one to address the consequences for your LLC if you die or become disabled. And on the basis of this agreement, you should advise your successors as to what should happen to your single-member LLC and its assets upon your disability or death.

19. Your tax and financial professionals. You should advise your successors as to the identity of the tax and financial professionals whose help you use in keeping your family and business books and in preparing your tax returns, and you should provide your successors with contact information for these professionals.

20. Retirement plans. If you have a SEP-IRA or other federally tax-favored retirement plan or other retirement plan, you should provide your successors with the name of each such plan and with the names and contact information of the retirement plan professionals who have assisted you in creating them or with whom you work in managing and making contributions to them.

Next week: Issues 21 through 32.

John Cunningham is a lawyer licensed to practice law in New Hampshire and Massachusetts. He is of counsel to the law firm of McLane Middleton, P.A. Contact him at 856-7172 or lawjmc@comcast.net. His website is llc199a.com. For access to all of his Law in the Marketplace columns, visit concordmonitor.com.