In recent times we have been reminded of the importance of adequate documentation in a number of situations.  

On one occasion we were asked to sort out a business dispute where the client had no record of a partnership or employment agreement, no purchase contract, no supporting financial statements, and trust deeds were all over the place. In another case, this time involving estate planning, the client had been through a divorce some years ago. When one partner passed away suddenly, it was revealed that the deceased had not updated the will since settling the divorce.

What should have been a straight-forward process became very complicated and drawn out. Of course the best possible outcome will eventually be achieved, but without a will the emotional stress and monetary cost is always on a much larger scale.

A lack of necessary paperwork relating to business structures, wills and estate planning gives accountants and lawyers limited options to assist in the resolution of disputes.
 

In another similar situation, we reviewed a client’s will and discovered it didn’t actually state what he wanted it to say, not to mention the will itself had not been signed off correctly. There are a number of protocols which need to be followed when signing a will and these protocols are put in place to ensure those who are left after you pass have a clear understanding of how you’d like your assets to be handled. (For more detailed advice on organising your will, understanding the role of an executor and power of attorney and how to implement safeguards to ensure your final wishes are met, download a copy of our estate planning e-book.)

So, what should you do about this? 

Firstly, when embarking on any venture, whether it be a commercial deal or joint partnership, ensure you always record the arrangements you have made. In my view, these agreements should be prepared by a lawyer to make sure all legal issues are covered and documented accordingly to ensure they can be relied upon in the future.

Secondly, review all of your personal and business documents – including partnership arrangements, wills and powers of attorney – on a regular basis. In particular, during significant periods of change; this may include marriage separation, or a birth or death in the family. I would suggest reviewing all relevant documents every five years as a guide.

As an immediate action, establish a file of all of your documents and go through a review process to ensure the intentions of all parties have been appropriately recorded.

The cost in dollars and time now will probably save you much more when these documents need to be relied on in the future – and, that could be tomorrow.