I’ve been looking back over some of our older blog posts. This one caught my eye, as these Case Studies reflect the situations we come across time and time again.
They are real stories. We’ve changed the names for privacy reasons.
Case 1: Debt-free Or Financial Ruin?
Liz rang late last year. She’d sold her majority shareholding in a thriving multi-national business. An excited Liz told us she’d “paid off” all her loans, mortgages etc. She felt relieved to finally be debt-free.
Yet a review of Liz’s affairs found some worrying things. Liz had helped set up her brother’s company many years ago. This left her 100% exposed to any and all liabilities – past and future – incurred by that company. Liz was horrified and now has a plan in place to rectify the situation.
Liz may have been “debt-free”, but she was exposed to potential financial ruin.
Case 2: She’ll Be Right Mate
At the beginning of 2012 John engaged Full Focus to carry out a Wealth Maximisation Audit. This highlighted some glaring errors in both John’s personal and business affairs. These included –
- Incorrect or non-existent legal documents.
- Inadequate and incorrectly owned life insurance.
- Out-of-control financial borrowings.
- No consideration had been given to his business as a whole.
Added to all this, much of the customer information was in John’s head. So too, was his wealth of industry knowledge and expertise.
Being a gung-ho kind of fellow with a “she’ll be right” attitude, John didn’t follow-through with the advice.
Tragically, John dropped dead during the year. His young family was left as true “hostages to fate” as they sorted through the mess left behind.
“She’ll be right mate” doesn’t always do the job.
Case 3: Who’s Business Was It Anyway?
Gail came to us during the year with a major cashflow problem. Her business appeared to be in reasonable shape with plenty of work on the go, so why the cashflow issue?
Debtors were all over the place. There was no real way to expect when the money would come in. Cheques were being written but not posted to creditors. There was no system to show what money was coming in, what needed to go out, and when. It was a mess – but one with an easy solution.
We helped Gail with a simple cashflow system that showed exactly what was in her account at any given time. She knew what was due when, and what she could expect when. Unfortunately Gail’s Admin Assistant didn’t want to use the cashflow system. She liked the old system. Gail didn’t want to ruffle feathers, so she agreed to keep the status quo. We hear Gail’s business is now in dire straits.
You have to ask the question ….. whose business was it anyway?
Case 4: Taking The Medicine
Sam approached us mid-year and asked for help ramping up the sales in his business. A practical and achievable sales strategy was put together. It was designed to increase revenue by 20%. But, we all agreed, a few things would have to change to reach the target. Despite agreeing with everything, Sam didn’t actually change much. He kept doing things the same way and expecting a different result. It soon became clear we were not only wasting our time, we were wasting Sam’s money, so we terminated the assignment.
Sam’s business finished 2012 much the same way as it started. There was mediocre income from mediocre efforts. No surprises there. But he had the opportunity to blow his sales results out of the water … even paid good money for it …. so why didn’t he take the medicine?
Case 5: Who Wins This Game?
We were referred to Bill during the year. Bill was a very successful entrepreneur. Some time ago he’d remarried and gained 2 stepchildren. He also had a daughter from his previous marriage.
Bill wanted to make sure his first daughter was “looked after” in the event of his death. He made a provision in his will to pay her $250,000.
A review of his assets (some $3 million plus) showed everything was jointly owned with his current wife. This meant all the assets would go to his wife and then to her children. Bill’s assets would bypass his first daughter altogether. This would completely nullify his wish to provide for her. This not only leads to confrontation and upset, it leaves his will open to being contested.
There’s only one winner in this scenario – the lawyers. They’ll charge plenty against Bill’s estate over the many years it will take to sort the mess out.
Case 6: Cause And Effect
Trevor was a wealthy businessman with a large property portfolio. He decided to put together his own will. He left his commercial properties to his son. He left his residential properties to his daughter. For some unknown reason, Trevor left the balance of his estate to his ex-wife.
A few months later Trevor was offered a deal he couldn’t refuse. It was an opportunity to buy some sought-after farmland. So he sold his residential properties and bought the farmland.
Not long after that, he died. Trevor’s son got the commercial properties. His daughter got nothing. His ex-wife got the prized farmland.
Trevor failed to look at the whole picture. He never considered the ramifications down the line of buying and selling his assets.
Case 7: Buried, Cremated Or …..?
Simon had organised his will and specified his executors and trustees. But he didn’t specify any funeral arrangements or disposal of his remains.
Within 48 hours of his death, Simon’s children from his first marriage were pushing for an Anglican Church service and burial. The children from his second marriage didn’t want any kind of church service. They wanted cremation. Simon’s widow wanted his remains cremated and his ashes scattered somewhere in Canterbury.
They now have to apply to the court about Simon’s funeral and disposal of his remains because no one is authorised to do it. Meanwhile, court and lawyers’ costs are adding up, as are storage fees at the funeral home.