torsdag 2 februari 2017

The importance of paperwork

Woman holding mobile phone over paperwork on a table

Dreaded paperwork. Why do we need it?

Mostly you do not. But when things go bad in life, a partner that leaves, a business partner that tries to maneuver you out or a death in the family.

I've experienced all three either personally or from the sidewalk when it happened to someone close to me and boy did I/they wish that the paperwork was in place when things started to roll in an unexpected direction.

The private partner part

Not the most romantic discussion with the person that you want to share your life with, but being open about the possibility of things ending (for various reasons) should be part of a successful relationship. And in the end it should mitigate a long lasting court battle if the end is not on good terms.
Also, if things end, make sure that you directly update paperwork on your part that your partner is no longer your partner. This is something that people tend to forget and things can take a quite ugly turn depending on life situations etc. Especially if you happen to die. It is no fun feeling if an old ex tries to get part of the inheritance by saying that they were still together when you died.

The death part

Another topic that people try to ignore. We are all mortal and are going to die one day. It could be today or in 80 years, no one knows for sure. And that is the reason you should think of this already when you are starting out in your twenties. Make sure you have documents on who should inherit the few belongings that you have managed to get. And then to revisit this documentation at a given interval and at bigger life-changing events for example marriage, divorce, having children etc.
Another topic to have in writing is how you want your funeral to be, if you have a vision, write it down, write down what songs should be played what coffin you want. Do you want a tombstone? Be burried or cremated? If you do not write it down, your family will have to guess and in worst case there will be a battle of wills and people will become unfriendly.

One thing that is sure is that when someone dies, all old sins come into play. Unknown children appear, people find out they have more siblings then they thought. A lot of tension can build up and at this point, finding paperwork on how you wanted things to go will really help.

The business partner part

In short, I was young and naive and people tend to take advantage of that. I put in 16 hour days to deliver product for a company and I was promised a lot but no papers were signed.
Once the product was developed, the tone of my business partners changed and they would rather not share the profits with me.
So in the end, not the best deal in my life. Probably the worst and I learned a lot.
Even if you are at your workplace, if the management starts to ask you to put in a little extra to get whatever perks they are offering, make sure that it is in writing before you commit. In the end it shows your management that you want to do this, but you also want a commitment from their side before you start. If they are hesitant in doing so, then maybe you should be hesitant in doing the extra for free as well.
If you are in a startup, especially with a partner or two, hire a legal counselor to put the deal in writing so that there are no hiccups later on. If things go good, you know how to split the profits, if things go bad you should also know what is expected of every partner at that point.

Conclusion

Boring as it sounds, you should do the paperwork and make sure that it is in place before committing yourself to anything. Good paperwork should allow you to sleep well at night knowing that you are secure if your work situation changes and that your family and kids are taken care of if something should happen to you.

And make sure you get a legal counselor to look at and validate whatever documents you are about to sign, just to make sure that they are written in a way that conveys the message that you want to tell.


Until next time: Work to Live, Don’t Live to Work

Disclaimer. I am in no way an expert on capital management or investing. On this blog I only wish to share my findings, ideas and comments on current events and fields that interest me. I hope that my thoughts can entertain you. I expect that everyone reading take their time and do their own research before acting on anything read on this blog. Investing is not for everyone. E&OE.

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