Power of Attorney for Entrepreneurs - The One Thing You Must Do to Protect Your Business with Nicole Wipp - Genius Network Episode #91

It's an issue of Smart Planning 101. What every entrepreneur needs to prepare so that their business can be self sustaining. What do you do if you have an unexpected medical crisis? Who would handle your business? How will your business survive? Nicole Whipp is the elder law, Estate planning principal, attorney, and founder of the Family and Aging Law Center. If you would like access to the complete presentation, the show notes and the links for this episode, please visit geniusnetwork.com91. That's geniusnetwork.com9. If you were unexpectedly in the hospital for an extended period of time due to an accident, cancer or some other illness, what would happen to your business? Who would make the decisions, and would they have the legal authority to do so? An unexpected medical crisis can happen to anyone, including entrepreneurs and business owners. Yet less than 1% have the correct plan in place. I want to reiterate that less than 1% have the correct plan in place. Nicole Whipp, for over 10 years, has been helping hundreds of small business owners and entrepreneurs engage in smart planning for their businesses and their loved ones. As a lawyer and business advisor, she's been on a renewed mission since 11:16am Jan. 4, 2015, when the unexpected happened to her. Nicole's title is Poas for Entrepreneurs. What yout Think you know, But Really Don't. Please welcome Nicole Whipp.

Thank you. So by a show of hands, who in this room has themselves been hospitalized, had a loved one hospitalized, or let's say a good friend in the last three years? So that's over 50% of the room, right? All right. So on the other hand, who in this room, by a show of hands, has never been sick a day in their lives? Never been sick a day in their lives? Nobody. So that leads me to the point of this presentation. If an unexpected medical crisis were to happen to you, to me, to the entrepreneur, would your business survive or would it implode or even destruct? Because this is the thing we want to ensure strong continuity of our business, no matter what. And there's a lot of things that we can do to protect our businesses. But there's one thing that in my opinion, you must do. But in my experience, very few of us have actually done it or we haven't done it in the way that I'm going to talk to you about today. Now, this one thing is cost effective for most people. We're looking at under $1,000 or even under $500 to get this accomplished. And it's actually pretty simple and easy to implement. But like I said, very Few people have done it. Why haven't we done it? Well, the first reason, and I think the most obvious, is because it's not something that's very pleasant to think about. We don't want to think about it. And it's just frankly not exciting, right? It's not an exciting thing to think about. But also a lot of times what I've noticed is that people make a lot of assumptions about the law. Even extremely educated people, people that are very knowledgeable about a lot of things, like the people in this room, make assumptions about the law that, to be quite honest with you, are completely fatal to your business if you get stuck in this position. Additionally, when we're talking about these topics, a lot of times it's an either the context of business formation or it's in the context of estate planning, which the focus of estate planning is for the most part on death planning, right? What happens if I die or when I die? Because it's not if, it's when. But I ask you, what happens if you live? So before I get into the things that you need to be thinking about and how you need to think about this, I'd like to share a story with you. At 11:16am on January 4, 2015, I was many things. I was an entrepreneur. I was a wife to my husband, Marcus. I was a mother to my then 4 year old son, Merrick. I was a daughter, a sister, an employer. I was a lot of different things to a lot of people. But something that had been brewing inside of me, unbeknownst to me, came to a head that day. I ended up in the emergency room of a hospital where I ended up spending over 30 days straight. I was in two different hospitals. I had four surgeries, I was given over 50 different medications, and I saw over 40 doctors. Like I said, all of this completely came at me from nowhere. Imagine yourself in this position, right? What would it be like for your business if you had to spend 30 complete days of having no ability to be in contact with your business or to run it? But then let's take it a step further because of course you spend 30 days in the hospital. That's not the end of the story. I had another 60 days of just recovery and then a whole other year till this day of getting back to health. But the 90 days that I spent out of my business were crucial, right? And think about yourselves in this position. Would your business survive if you could not run it for 90 days? And that's one of the things that we need to be Thinking about. Because a lot of times when we have done anything related to this, people will say to me all the time, I've got that taken care of. I did my power of attorney, or I have that in my operating agreement or whatever. Right? But have you thought about it? Because we don't have cookie cutter businesses. Nobody in this room has a cookie cutter business. If you're in this room with this group of people, there is no way that your business is exactly like anybody else's. Right? My business is nothing like Denise's business. Denise's business is nothing like Joe's, nothing like Michael's. Right. None of us have even remotely similar businesses. Similarly, none of us have cookie cutter families or life situations. Right. Some of us are married, some of us aren't. Some of us are divorced, maybe more than one time. Some of us have children, some of us don't. Some of us have many children. Right? And so these are all dynamics that play into this thought process in this conversation. But what happens is that it's a byproduct, or we think of it as a byproduct and not as a conscious planning thought process. And so that's one of the things that I want you to be thinking about, is what assumptions are you making about the law and what can happen related to your business in the law? Because for most small business owners, and when I say small, I'm not talking about small in money, I'm talking about small in operational size for the most part. Now, what I see is a lot of times people that have a larger operation have thought this through a little bit better or have things in place, but that's not always the case. So we need to be thinking about it. But what assumptions are you making? I mean, who has the legal authority to go to the bank and conduct banking transactions on behalf of your business? Does somebody actually have legal authority to do this? Probably not. If you don't actually have a specific legal document or plan in place related to that, who has the ability to enter into contracts, make capital purchases, hire, hire and fire employees, sell your business at what is considered fair market value at the time, if that becomes necessary. Right. So these are all questions that need to be answered. Now, by the way, I do want you to know that I have prepared for you, which will be given at the end of this, a list of 25 things that, at the minimum, you should be thinking about that will be handed out. So you don't need to write any of those down, but it's just something that you need to think about who has the legal authority to do these, because without the legal authority to do this, your business can implode or even destruct. Now, in my case, luckily, because this is what I do for a living, and I think about it every single day, I have that plan in place. And for my business, one of the people that was key in that was a key employee that I have in my business, who's worked for me for several years, knows my business inside out and backwards and whom I trust implicitly. Now, notice that it is not my husband, okay? And think about this, because for some of you, if you have a power of attorney in place, it may cover some of your business things. And usually when we're talking about our personal estate planning documents, it's our spouse, if we have one, that's the person that's in charge. But ask yourself this. I mean, you know, we all can imagine, is our spouse the right person to be running our business? And for many of us, the answer is no. You know, it doesn't matter. Your spouse can be a perfectly competent, brilliant, wonderful person, but they might not be the right person to be running your business and specifically not the right person to be running your business in the event that you have a medical crisis. Because imagine here I am in the hospital for 30 days and during which, by the way, I received what was considered to be a death sentence at the time, I got diagnosed with a very rare lung disease called lymphangioleiomyomatosis. And so in this context, I have this rare disease. I mean, all this stuff is going on. The last thing my husband is thinking about or cares about is my business. The wife of his wife, the mother of his son, is dying in front of his eyes. That's the last thing that he can think about is what's going on with my business. He would have been in no state to operate it on my behalf even if he were the right person to do so. And so in the unexpected medical crisis situation, we need to thinking about this, even if your spouse is the right person, are they the right person in that kind of situation? And do we need to have a backup? And of course, on many levels, and we know this just as a general thing, it's always a good idea to consider keeping your personal business and your business business separate, right? And there are many good reasons for doing that. So one of the things that I get often asked by entrepreneurs is, well, then who's a good person? Like, who do I pick? Because I don't know who to pick and that's right. Once again getting back to the cookie cutter thing. So maybe it's a key employee, maybe it's your in laws, maybe it's your brother in law, maybe it's your brother. You know, it could be a lot of people. This is something you need to think about at the end of the day. The unexpected can happen to anyone at any time. We all know this. Sean's story earlier today. You need to go see your business lawyer and get this done. We all make hard decisions every day. This is just yet another one that you need to do. Get it done. That's just Smart Planning 101.

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