Imagine a green box, A4 size or larger. We can perceive more variations of green than any other colour on Earth. So take your pick: sea green, emerald green, lime green… The box can be any shade of green you choose.
And it’s marked Only to be opened after I die.
Ouch. Maybe that hit a nerve. But your green box is the biggest favour you can offer your family. It gives them everything they need to navigate the confusion that follows the death of a loved one.
I’m in my mid-fifties. I’ve seen the mess people leave when they pass away. Even in death, we’re mired in paperwork. But then it’s up to our solicitors, accountants and executors to tidy everything up.
This is even more important for business owners. Unless you have a spouse, son or daughter who is fully engaged in running your business, chances are your family will want to sell it if you die unexpectedly. And if they can’t run the business, they need to sell it before its value declines. Is it ready to put on the market?
There are three criteria which tell me a business is ready for sale. I’ve written about them before, but here’s a quick recap:
- Three years of accounts showing a steady rise in profitability.
- Clear procedures for every aspect of the business.
- A business which operates effectively, even in the owner’s absence.
Your accountant should have access to your business accounts. If you’re a client of our financial concierge service, your executor will have all the data needed to prove the viability of your business. So you can tick that off your list.
When your executor opens your green box after you die, a copy of your will should be at the top of the pile. It shows how you want your estate to be distributed. But your executor and solicitor are going to need a lot more information.
- All your bank accounts: trading accounts, savings accounts, term deposits.
- All your lines of credit: loans, mortgages, credit cards.
- Your superannuation account or accounts.
- Your insurance policies.
- Details of all the properties you own, including title deeds.
- All your other investments: stocks, bonds, precious metals, crypto, and all the paperwork and access details associated with these investments.
- All the data needed to calculate capital gains after your assets are sold.
Perhaps you’re also a collector. Art, classic cars, Regency furniture, whatever. These can be difficult for your estate to value, especially if your executor does not share your interests. So list all these items too, along with your estimated valuation. Add details of a trusted dealer or auction house that can help liquidate your collection.
The more you think about your assets, the more pressing the need for a green box becomes. But you realise that everything is dynamic.
You need one set of information in your green box as a business owner.
Once you’ve retired, you need a different set of information.
Whenever your circumstances change, you need to update your green box.
By now, you realise that the box itself is a metaphor for something much more complex: a data set that’s securely stored and updated regularly. Because this green box includes the access codes and passwords to all your accounts, it needs to be 100% unhackable.
This means keeping your green box well clear of the internet. It might be a physical box filled with paper documents and kept in a fireproof safe. It might be a portable hard drive which is only ever connected to a firewalled computer when you need to update its contents. You might have two green boxes; one kept in your home or office, an identical copy held at your lawyer’s premises, or in a bank vault.
Whatever you decide, your green box needs to be secure, up-to-date, and complete.
As a financial concierge, it’s my job to tailor a green box to your specific requirements. We’ll develop processes to ensure it stays up to date, with new information added in real time, and redundant information deleted. We’ll work with your solicitor to ensure the security of all your data, so you can sleep peacefully. And we’ll make it easy for your executor to finalise your estate after you pass.
Why is the box green? Because green is the colour of regeneration. Your children and grandchildren will grow new wealth on the bed you’ve created. The green box provides them with all the seeds they need.