A: Your estate will be held responsible for the debts that you signed surety for. But what can happen is that your spouse will inherit less than you intended and may struggle to survive.

Q. If I lend some of my personal money to my business, how do I ensure that if something happens to me my heirs will get it back?

A. Firstly, you need to ensure that there is proper proof of the loan to the business. Then you need to ensure that your business has enough financial resources to redeem the loan, otherwise the chances are slim that your heirs will recover it at all.

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Q. My business partner and I have entered into a buy and sell agreement and have taken out policies on each other's lives. However, I am unsure whether the cover is still adequate. How often do I need to review this?

A. Preferably annually. This way, the cover amount will stay up to date with whatever changes there may be to value of the business.

Q. The designer in my jewellery business is the backbone of the business. Should I insure him, or should he cover himself in case of death or disability?

A. It seems as if your designer is a key person in your business. Although he needs to take care of his personal financial risks to make sure that he provides adequately for his spouse and children, it is in your best interest to also take out key person insurance on his life. This will enable you to replace him as soon as possible, before his loss adversely affects your business turnover and ultimately your profit.

Q. Sometime ago I had a cash-flow problem and had to borrow money from my business. What happens to this loan if I die before it is repaid?

A. Unfortunately, the loan will have to be repaid, whether it is at the end of a specified term, or at your death. It is therefore important to make provision for such events, so that you, your estate or your heirs can settle the loan comfortably.

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