What happens to your business if the worst happens to you?

Posted on February 16, 2023 | By Ashley Fitzpatrick | 0 Comments


Kimberley and Larry Short (Submitted photo)
What’s sure to happen to every business owner and operator? Death and taxes. It’s an old joke, but it’s also unfortunately common for small business owners to be uncomfortable discussing both. Beyond the joke, neglecting to plan for serious accident or illness can sometimes make it impossible for a small business to continue.
At their office in St. John’s, partners Kimberley Short and Larry Short come across the fallout all the time. They do estate planning for small business owners and operators as part of their work; they even had a related client meeting within 24 hours of a recent interview with Atlantic Business Magazine. The pair—Kimberley, a certified trust and estate planner (CIM, CFP, FCSI, MFA-P, TEP) and Larry, a chartered professional accountant (CPA, CGA, CIM, CFP) —lead the ShortFinancial team, with iA Private Wealth. They’ve seen case after case where clients have not had discussions about power of attorney, at least not before something unfortunate has happened. By then, they’re in the middle of dealing with a particularly difficult situation with no clear directions at the ready.

There are specific considerations for business owners and operators. Someone might not think about, for instance, having more than one power of attorney in place. Said Kimberley Short: “You may in fact need a power of attorney for somebody to act on my behalf in relation—and I’ll use myself as an example—to my personal life, my personal finances and my personal property. But I may need a different power of attorney substitute decision maker to step into my shoes as proprietor of ShortFinancial, somebody who carries the right designations and skill sets, etcetera, in order to be able to run a business like this one.”

There’s plenty to think about. And getting caught out trying to answer difficult questions in what can be emotional times happens to individuals with small and medium-sized enterprises all the time: mom and pop stores, family restaurants, trades service businesses. It’s across the board, the Shorts said. Even when people have thought through what would happen in the event of a sudden death, they sometimes fail to address what could occur through the span of a life.

“It’s that intermediate phase where we think that people just are not having that conversation. That’s why we highlighted it in the book, to say if you get nothing else done, get this (power of attorney) part done,” said Larry Short, calling on people to take some time with properly credentialed advisors, including financial and legal.

“The book” Short referred to is The Last Act: Closing the Book on Your Finances, written by the pair and the latest release from CPA Canada’s financial literacy series. It covers all of what you can work through in the here and now. The couple were asked to tackle the book project given their past experience with financial literacy and communications. Among other things, Larry Short has been on the board of CPA Canada’s financial literacy committee for well over a decade and was periodically asked by CPA to speak publicly on related topics. Kimberley Short has also taken up speaking invitations but garnered particular attention with an episode of the CPA’s Mastering Money podcast in February 2021. The episode, Going It Alone, focused on a discussion about widows – at an average age of 56 in Canada – experiencing the challenge of having to manage finances after the death of their spouse, where they had not previously been handling finances alone or outside of the day-to-day accounts. The podcast became one of the most successful episodes ever for the show, in listeners and response.

With their experiences, the Shorts were asked to write the new CPA title together. It was vetted by CPA representatives prior to release, checking the technical points were sound and any advice was useful for readers throughout Canada, regardless of province. The Shorts said they were keen not to overstep on direct advice. In practice, they avoided the trap of trying to imagine and write answers to every possible life scenario that would require power of attorney or other topics like executors, trusts, disposition of assets, more.

Their approach was to keep things simple and straightforward. In sticking to easy-to-read text and quick, tight chapters, they offer a foundation. It’s enough detail for people to feel better prepared to ask whatever they might need to, to see the value in thinking ahead and ultimately be confident in their plans and preparations.

Some of the advice is very simple, but modern. For example, the Shorts discuss digital assets. Who has access to accounts? Are passwords protected but available to decision makers? Have you thought about who might have the right to touch social media, delete accounts, transfer assets?

There are limits to how far the book alone will take you, particularly in terms of wills and estates. “Let’s be clear about this – owning a business automatically means you have a complicated will and one that needs professionals involved to both prepare and manage your estate,” the Shorts state at one point.

However, it offers food for thought and prompts much needed thinking about the future.

“Even before you get to the will, we advocate you get powers of attorney straightened away,” Larry Short reiterated, when asked what he would highlight from the new title.

Since the release of the book, with some local media coverage and more to come nationally, the couple said people have been approaching them to share horror stories and general thoughts on avoiding them. “It’s happening everywhere. In a gas station, in a yoga studio, Larry getting his glasses adjusted, it’s happening in an airport. It’s now pretty much everywhere we go, which is kind of neat. It’s clearly struck a chord with almost everyone who has heard of it or heard any of the interviews we’ve done,” Kimberley Short said. “That’s great — just getting people thinking about what steps they can take now.”

Disclaimer: The opinions expressed by Kimberley Short and Larry Short, Portfolio Managers, iA Private Wealth do not necessarily reflect the opinion of iA Private Wealth Inc. The opinions expressed are based on an analysis and interpretation and do not constitute an offer or solicitation to buy or sell any of the securities mentioned. The information contained herein may not apply to all types of investors. ​iA Private Wealth Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. iA Private Wealth is a trademark and a business name under which iA Private Wealth Inc. operates. ​Insurance products are provided through iA Private Wealth Insurance, which is a trade name of PPI Management Inc. Only products and services offered through iA Private Wealth Inc. are covered by the Canadian Investor Protection Fund.

About our Book Report series
In Book Report, Atlantic Business Magazine is highlighting non-fiction focused on Atlantic Canada and Atlantic Canadians, or of particular use to local business owners. We like to feature books from Atlantic Canadian publishers. These short pieces will offer details from upcoming business biographies, Q&As on new releases and in some cases fresh commentary from non-fiction authors on the subjects of their published works.

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