Forget a New Year Resolution. Consider These Essential Audits For Individuals, Families, and Small Business Owners Instead.

Every new year we create resolutions for the year and hope to see them through. Whether the resolution is related to a personal goal or a business goal it is important to have a plan to back up the resolution.

The Covid-19 pandemic has made 2020 a hard year for most people, forcing us to reflect on our lives and businesses. The hardships brought on by the Pandemic have tested our collective resilience. We have all been affected, whether we were struck with the virus or not. For many of us, work looked very different. For children, who have been in virtual school for about nine months, socialising with friends has migrated to virtual worlds on platforms like Roblox. It’s been an adjustment for everyone, to say the least.

What is certain is that when we emerge from this, life will not look the same. I imagine that we will reference certain things or practices by whether they are Before Covid (BC) or After Covid (AC). We will have stories for the next generation about how we survived this global pandemic and like those who have survived war, we will pass on our survival stories and the lessons learned from this period.

There are many lessons from this pandemic. We were all reminded of how precious life and relationships are. So, I imagine that we are all entering 2021 with gratitude, taking stock of what we have and the things most dear to us, and being mindful of our lives and the choices we make.

For those of us who have been fortunate to see this year, we enter the year with hope. With the various vaccines being rolled out, we can see light. Even though we are not sure how much farther we have to go until we are out of the tunnel, there is hope that the end is near.

Now that we are here, what do you plan to do with 2021? I suggest you take the time and conduct three essential audits for your life and business to inform your plans and hold yourself accountable. A life audit to surround yourself with the people and tools to advance your personal growth and wellbeing; an intellectual property audit to maximise your income potential and protect your business from liability; and an estate planning audit to ensure that you and your loved ones are protected in the event that you become incapacitated.

Life Audit

This is where you take a look at aspects of your life that are not necessarily economic. Assess your relationships, your health, your finances, your habits, your living conditions, and any other identifiable area of your life that is integral to your overall happiness and spiritual well-being. Be very honest with yourself in areas where you need to do better. Pick one, two, or three areas that you want to focus on. Be realistic, you probably can’t tackle them all with the same intensity so focus on the areas that will bring you the most satisfaction. It could be that you want to spend more time with your family, get certification for professional advancement, lose weight, run a marathon, travel to a destination you’ve never been to, etc.

Once you have selected the areas in your life that you want to focus on, use the SMART goals to create a plan.

SMART goals are specific, measurable, attainable, realistic, and time-bound.

Write down those goals and hold yourself accountable.

Intellectual Property Audit

This is especially for my small business and creative business owners. Your intellectual property is just as important as your real property, so it is important that you take steps to protect your IP assets from infringement, maximise your earning potential by leveraging on your IP assets, having policies and agreements that protect your IP assets, and avoiding liability from infringing on third-party IP rights.

The best way to start a self-IP audit is to compile a list of all IP assets in use in your business including any names, sounds, images, publications, domain names, trade secrets, and proprietary processes. Then ask the following questions?

• Have all registrable assets, i.e., domain names, trademarks, and patents, been registered? 
• Is there a system to track the terms and renewal dates for all registered assets?
• Are copyright legends included on all copyrightable assets like websites and publications?
• Are there any trade secrets in the business and are they adequately protected by agreements with employees, contractors, and other third-party associates?
• For assets created by a third-party under contract, has the IP been assigned from the contractor to your business by written agreement? Is there appropriate IP indemnification and disclaimer language included in the contract?
• Do all employee and contractor agreements include terms concerning the ownership and confidentiality of their work? Have they signed written agreements with these terms?
• Is there a policy to remind employees and contractors of their post-employment confidentiality obligations to your business?
• Are there signed confidential agreements with all business associates and contractors?
• Are you using any licensed third party assets? Is there an appropriate method of tracking that your use is in conformity with the license agreement? Are there any restrictions on the use of the licensed asset? And what is the duration of the license?
• Do you have a method for tracking the use of any IP assets licensed to third parties?
• Do you have a method for policing use of your IP assets?
• For each identified IP asset in the first step, conduct a search to determine whether your assets might be infringing on another business’s copyright, patent, or trademark.
• Conduct an analysis of all identified assets to determine the optimal exploitation level for maximum profits.

Estate Audit

Every adult should be aware of what is in their estate and have a plan to manage their estate in life and at death. The idea that estate planning is only for wealthy people is false. I understand that culturally, planning for death is like inviting death, but, to quote Christopher Bullock, “‘Tis impossible to be sure of any thing but Death and Taxes.”

Death and taxes are an inevitable part of life. Planning for both helps us prepare for the often devastating impact they can have on us and our loved ones when we do not plan. An estate plan is important for every adult, particularly those with minor children.

It is a fallacy to believe that only millionaires need to worry about an estate plan. If you have minor children, a bank account, or own any physical or intellectual property assets, you should have an estate plan. You should have a plan for who will take care of your children should something happen to you or your spouse. The beneficiaries of your bank accounts, financial instruments, and insurance policies should something happen to you.

Death is not the only reason to plan. You should also prepare for what happens to your business and personal affairs should you become incapacitated and unable to conduct your affairs on your own. Major life events such as a marriage, birth, death, or divorce are a trigger for an estate assessment and estate plan update.

Here are some simple things to do for an estate audit:

• The easy first step is to create a record of all your assets – real, financial, intellectual property, digital, etc, and liabilities. Include in your record the numbers of accounts, passwords, contact details, and other important information in your record and keep it in a secure place accessible only to those who need it to conduct your affairs if you become incapacitated. 
• The next easy step is to ensure that your beneficiary information is up to date on your bank accounts, retirement accounts, insurance policies, and other financial instruments. 
• Assess your insurance position. Holding an insurance policy may seem like throwing money into a hole, but if you’ve ever had to deal with a catastrophic life event without insurance, you would appreciate the value of having appropriate insurance coverage for life events. Health insurance and life insurance are essential. If you are employed, you may have policies through your job. If you are self-employed, explore the possibility of joining a group plan through your professional guild or association.  
• If you have minor children, consider the people in your life who you would want to have guardianship of your children should something happen to you (and your spouse, if you are married). Have a discussion about it with them and appoint them either through your will or other legal instruments. The appointment will not take effect while you or the other surviving parent of the child are alive. You want to choose a guardian who is in good health, who you believe will accept your child with patience and love, and who shares similar values as you do.
• You may also want to consider having a power of attorney in respect of your business in the event that you become incapacitated and cannot make decisions on your own. A power of attorney in respect of your business helps to ensure that your business carries on operating even when you are not able to run it yourself. Your family members may not be the best to run your business. 
• A financial power of attorney in respect of your money gives authority to your appointed attorney to operate your bank accounts, pay your bills, meet your financial obligations, and carry out other money-related duties on your behalf if you are incapacitated and are unable to do it yourself. If your business and personal accounts are run jointly with other people, the financial power of attorney may not be necessary. 
• Consider also a healthcare power of attorney. Who would you want to make healthcare decisions for you if you are not able to do so for yourself? Even if you do not formally appoint one, discuss with them what your wishes are if you are in a health-related situation where you cannot direct your own care, or make decisions for yourself.
• Finally, talk to a lawyer to discuss the best way to transfer your assets to your beneficiaries. Several factors such as the types of assets you own, tax considerations, and probate administration will determine whether a will or a trust or both, is the best way to transfer your estate to your loved ones. For my creative friends who think that they have nothing of value to leave in a will, don’t forget that your intellectual property is protected for 70 years after your death. You will want to put control of your IP rights in the hands of a trusted beneficiary who can exploit them for the benefit of the loved ones that you leave behind. If you are using a trust, you will need to appoint trustees who will hold the assets for your beneficiaries. If you are using a will, you will appoint an executor who will manage the distribution of your estate to your surviving loved ones. 

The choice of guardians, powers of attorneys, trustees, and executors for your affairs should be done with your head and not your heart. These roles require prudent people who are responsible and trustworthy, who will be faithful to your values and your interests in carrying out their duties on your behalf. Your lawyer will help you create the legal documents to express your intentions, but it helps if you have given some thought to your aspirations for your family and how you want them to benefit from the fruits of your labour.  

Shake things up this year. Don’t just do the regular new year’s resolution that you won’t commit to beyond February. Do something with a long term impact on your life and business.

HAPPY NEW YEAR!