Continuity Planning

Our friend John has a job at Publix. He has a good job, a comfortable salary, and a nice home. However, John has never thought about what would happen if he lost his job or became ill or injured. One day, John is involved in a car accident and is unable to work for several months. During this time, his expenses continue to mount.  He still has a mortgage, car payments, and other bills to pay. However, John has no savings and no disability insurance, so he quickly finds himself struggling to make ends meet.

“Continuity planning” refers to organizing one’s personal finances and lifestyle in the event of job loss, disability, or other unexpected events. 

The goal is risk management.  To protect your loved ones you must reduce any long-term risk for businesses and family investments.  Many of my clients have never heard of an umbrella policy, let alone a business succession or continuity plan.  

Here are some ways to reduce your risk of loss and plan for the future:

Obtain an “umbrella policy.”  Many car insurers do not offer enough coverage to protect you against liability claims.  Unfortunately, a bad accident with multiple injuries can wipe out your savings.  An umbrella policy provides extra coverage.  Check with your car insurer to see if they offer one to bundle with your auto plan.  Also, consider purchasing disability insurance or life insurance to provide financial support in the event of the unexpected.

Figure out your family’s needs and dynamics to plan for short- and long-term scenarios by identifying potential events that could disrupt your finances and lifestyle, such as job loss, illness, or death.

Create contingency plans for both personal assets and your business, such as establishing an emergency plan.  Aim to build up a savings account that can cover your expenses for three to six months.

Other asset protection strategies include the transfer of rental property to a business entity.