What if you die in the middle of the …
Mad Dog, you jogged my memory in a previous thread when you mentioned a homeowner asked you this question. I thought I should start a new one because I would like to hear how other small builders and craftsmen (and craftswomen) answer this question from a prospective client. I lost a new home building project 6 years ago because of this very question and I didn’t have a good answer. Today my company is capabable of building a home without me but it may not have been then. My answer a the time was I could rely on the subs to finish the job.
The first one who finds out, gets dibs on my tools.
Insurance. You can name the homeowner in a term policy for an amount equal to the project. Of course, I'd be REAL careful near completion.
*In years much past, I had often been concerned of my customers health when I had a huge invoice in the waiting....Not that concerned these days,near the stream...Life and death are just another day...or not.aj
*A few off-the-cuff legal-ish suggestions (not practicing law here):(1) Completion bond -- required in our jurisdiction -- protects the homeowner, not you;(2) Insurance -- and don't forget term life insurance to protect your family against loss of income;(3) Incorporate or otherwise limit liability -- limit risk for your family and estate if your death busts the company.This is an excellent topic to take to your friendly neighborhood lawyer. You'll then know you're OK and will sound sophisticated to the customer. Specific arrangements can be set forth in individual contracts, but they should be worded by your counsel. The prospective client asked you a very good question! The phrase "rely on subs" would have scared me away: your function as project manager is a critical one!Have you also addressed long-term disability? Your will, esp. transfer of assets? Ownership/control of your company (partnership?) post mortem? Health care power of attorney (enables your spouse or other trusted person make medical decisions upon your incapacity, at the extreme to "pull the plug")? Custody of minors, and trusts for their benefit?
*Ask how you know you'll get paid if they die.
*At the time I was asked this by my customer I was too concernrd with what to say so they would not change their minds about hiring my services. After they signed my contract and handed me the starting deposite I was driving back home and it then struck me that I should have asked the same question of them. As usual, daylate and a dollar short.
*Assuming I'd gotten a pretty hefty deposit before I kicked out, I might actually make some money on that job .Chuck
*It's always easy to come up with the witicisms later when the pressure's off.
*Not to be a wet blanket, but it could happen. My father died very unexpectedly while we were in the middle of two huge projects. He ran the business by himself, doing all the bookkeeping, sales, and dealing with subs and vendors. He had no life insurance personally or with the corporation as the beneficiary. I won't belabor the point but suffice it to say that it cost the company a huge amount of money to recover from that. I was lucky enough to have customers at the time who we had good relationships with and were patient with me while I tried to reconstruct their jobs. In short: If you are the principal in your business, especially in a small company where you are the key player, you should have a life insurance policy figured in as part of your overhead costs. You are doing your family and your customers a disservice if you don't.
*As an attorney, a professiojnal wet blanket, I agree entirely. Look at how often contractors go bankrupt as it is. And many people tend to think of inheritance in terms of assets, forgetting that the debts come along too.
*Seems like a question tailor made for the"Tavern" but the answers given have been very practical on a subject that most people would probably rather skirt. This is a great subject. The deceased can just roll over, but the sub's and employees must carry on with such mundane put practical questions as can someone sign the checks? Where are the keys and do we have a job Monday" Something to ponder on,, Skip