If Tomorrow Never Comes


Attention small business owners: are your affairs in order in case death takes you by surprise?

About 150,000 people around the world die every day; of these, about 730 are Canadians. Even though death is still inevitable, life expectancy for Canadians has risen significantly in the last hundred years and continues to rise. A male born in Canada in 1911, for example, could expect to live for 47.1 years and a female for 50.1 years. A male born a century later in 2012 can expect to reach 79.8 years of age and a female to reach 83.9. This dramatic extension of life expectancy is largely attributable to a sharp reduction in infant and child mortality rates through medical intervention (e.g., vaccinations), improved sanitation and a better quality of life through the elimination of child labour, improved education, and better diet.

Changing Statistics

PIn the years between 1979 and 2009, the percentage of deaths due to diseases of the heart declined sharply to 22% from 35% for men (to 20% from 34% for women) while the number of deaths attributable to malignant neoplasms (i.e., malignant tumours that spread to other parts of the body) rose to 31% from 22% for men (to 29% from 24% for women).

Unexpected Death

If death comes unexpectedly, are your business and personal affairs in order so your business associates and family can move forward with the minimum of problems? As a test of your preparedness, ask yourself the following questions. Your answers will indicate what you need to do to be ready in case the unthinkable happens. Discuss the results with the appropriate individual and document as required.

  • As a starting point, consider what information should be up to date.
  • Who has signing authority on business and personal bank accounts?
  • Who is your second to take over operations?
  • Is key man insurance in place?
  • Are financial statements current for valuation purposes?
  • Have you established protocols and the format of notification of your death to clients and suppliers? (email? text?)
  • Is there a (prewritten) letter to all clients and suppliers assuring them that the business is still viable and that named individuals will be looking after their accounts and business?
  • Does the company have a corporate lawyer and a corporate accountant who should be notified?
  • Is there a summary of all business and personal passwords to access bank accounts, tax accounts, computer programs, Cloud applications, hard drive backup, and client accounts?
  • Are the minutes of the company kept up to date?
  • Do the registers of directors and shareholders reflect current appointments?
  • Is there a listing of all business and personal insurance policies, RRSPs, TFSAs and other such investment vehicles that must be accessed?
  • Is there a listing of financing arrangements for business and personal vehicles, and your residence?
  • Is there a listing of all credit cards and required passwords to determine balances owing?

Is your will up to date to reflect changes in your personal life?

  • Is your will up to date to reflect a divorce, marriage, acquired children or other dependants who may have created claims on your estate?
  • Have you determined what, if anything, you wish to give to charities?
  • Are survivors aware of who has the original will?
  • Who is the executor(s) of the estate?
  • Have insurance policies, RRSPs, TFSAs and the like been updated to ensure that the named beneficiary is correct?
  • Have you reviewed personal and business debt to determine whether insurance coverage is adequate?
  • Has a guardian for children or those with disabilities been named?
  • Is access to safes and safety deposit boxes guaranteed with appropriate passwords, keys, and alarm codes?
  • Have you considered meeting with funeral directors to discuss funeral arrangements (and payment) for a religious funeral service, cremation or burial to reduce the stress on survivors?
  • Are family members aware that the Canada Pension Plan will pay a death benefit to the spouse and/or survivors in the event of your death?
  • Have you considered a Statement of Wishes that outlines such issues as funeral arrangements, custody of children, and any other area that you would like to be in place upon your death? (Although not necessarily legally enforceable, it does provide guidance to survivors in times of stress.)
  • And finally… have you made a list of the above-named items and provided those lists to the appropriate individuals who need to know how to act?

Act Now

We all put off what we should do today until tomorrow… but what if tomorrow never comes?

Contact Argento CPA today!


Disclaimer: BUSINESS MATTERS deals with a number of complex issues in a concise manner; it is recommended that accounting, legal or other appropriate professional advice should be sought before acting upon any of the information contained therein.