The LifeBook Concept
With the LifeBook concept, you develop your personal concept for pension provision and advice under expert guidance and advice. It includes aspects of asset planning, inheritance law, family law, tax law and, for entrepreneurs, also company law. As a result, the family should be able to act in an emergency and the testator’s ideas can be realised.
The Succession Check-up
As a first step, everyone should take stock. What regulations already exist? Wills, contracts of inheritance, gifts? Which assets should go to which persons in the event of an unforeseen death? This requires a complete statement of assets, preferably in the form of a private balance sheet. And the most important question for entrepreneurs and self-employed persons is: who will be the successor?
Private balance sheet and asset succession plan
The complete statement of assets and liabilities is best structured in the form of the private balance sheet. This systematically breaks down the assets for each family member and assigns any debts to them, such as outstanding loans for real estate. The asset succession plan then shows in a movement balance for the entire family which assets are to be passed on to whom and checks the plans with several tests:
The emergency plan
An emergency plan should then describe who is to be informed in case of failure and what measures are to be taken. The private emergency plan concerns the sick or deceased person and his or her relatives; the company emergency plan is a risk management measure and is intended to ensure the best possible continuation of business operations. It is to be drawn up with the company’s senior executives and implemented by them in the event of an emergency.
Documents and digital legacy
You must then provide all the necessary information for your relatives, especially bank accounts and insurance policies. And passwords and access codes. It is not uncommon for financial assets abroad to become ownerless because only the deceased, but not his or her relatives, knew of the existence and accesses.
Insurance policies
An orderly overview of all existing insurance policies is extremely helpful for surviving dependants, especially life insurance policies. The list should also indicate the location of the policies; it is best to include a copy of the policies in the LifeBook.
The list should list all existing insurance policies with their essential details. The list should be updated regularly. The current status, with dates, should be documented.
Power of Attorney for Business and Private Assets
In the event of death, heirs or relatives cannot immediately act on behalf of the deceased – they must first identify themselves as the beneficiary by means of a certificate of inheritance or a notarial will. However, this can take up valuable time. The testator should therefore issue powers of attorney to suitable persons. The same applies in the event that a person is no longer capable of conducting business or acting, for example in a coma situation.
If an entrepreneur drops out as managing director, others must be able to act on his behalf. If no procuration or power of attorney has been granted, business powers of attorney or general powers of attorney should be available in any case. This also applies to the level of the shareholder: as long as the heir cannot present a certificate of inheritance or a public will, he is not formally entitled and therefore cannot submit shareholder resolutions to the Commercial Register – for example, the resolution in which he appointed himself as the new managing director.
Power of attorney and living will
For his or her own personal situation due to serious illness or incapacity to work, each person provides as many decision-making aids as possible, such as a living will and a power of attorney. And in the event that both parents of underage children die, a declaration of custody is recommended, i.e. the naming of persons who are to exercise custody – or not. The family court will be guided by this.
In principle, these personal dispositions do not belong in a will, because otherwise they only become known when the will is made and therefore sometimes too late. Separate declarations are therefore more practicable, and in certain cases notarial recording is also recommended here.
The same also applies to dispositions and wishes for one’s own burial. Special wishes, for example regarding the type of burial, should be set out in a separate funeral order.
Letters to relatives and companies
Not infrequently, the testator formulates notes, instructions, wishes and greetings to his surviving dependants, but also to the company management. These statements are also better written in their own letters and should not be included in the will. In any case, the author must avoid reading from such communications testamentary instructions and conditions that undermine the actual will.
The Emergency Case Project
The compilation of an emergency case takes less time than is often assumed – but it is a consistent completion. In any case, the result helps the family and relatives and saves them some worries, at least at this point.
We rightly talk about these topics in our Round Table meetings. The Round Table is an action of Herfurth & Partner and serves to clarify and secure wishes and decisions in the family in connection with assets, provision and succession.
The next dates can be found in the Round Table section (welcome homepage).
Further information on many topics can be found in the Publications section (welcome homepage).
Angelika Herfurth
Attorney at law and specialist lawyer for family law