If you’re a self-published author, you’re also a small business with all that entails. From deciding a business structure to filing taxes, there are multiple decisions to be made. Should I register as a DBA (Doing Business As?). An LLC (Limited Liability Company?). How should I pay taxes on income earned?
All of these are important questions to consider, but here’s another one: As a business owner, what happens if I become incapacitated?
This is a question I recently had cause to consider. For several months I’d had intense, debilitating pain in my right shoulder and arm, accompanied by muscle weakness and numbing of my fingers and thumb. Long story short, I discovered I had a herniated disk in my neck necessitating surgery.
I’m not one who generally visits doctors. I’ve never had surgery, and aside from childbirth, never been admitted to a hospital. In addition to all that, I publish not only my own books, but have a very small publishing company that publishes a handful of other authors. I’ve very carefully kept my business structure and assets separate from personal and family assets. My LLC is in my name only, as are all of my accounts, including publishing, social media, and financial.
But what if something went wrong? What would happen to not only my own books, but those published by my little company? How would the authors get their rights back? How would they get paid? How could my family access any outstanding royalties of mine?
It was still important to me – crucial, even – to keep business separate from personal, but somehow I had to make sure business decisions could be made and loose ends tied if something happened to me.
I’ll preface this next section by saying I am not an attorney. If you have questions regarding your own business structure, don’t rely on anything I – or anyone else – says without doing your own research and following up any legal questions by contacting an attorney.
After conducting my own research, I decided I needed a Durable Power of Attorney for Financial Management. This is a document that gives my “agent” (I chose my husband) power to act on my behalf should I become “infirm, physically incapable of handling my financial affairs or mentally incapable of making reasonable judgements in respect of matters relating to all or any part of my estate….” It goes into effect upon the written declaration of “one (1) medical doctor licensed to practice in [my state, or a medical doctor chosen by my husband if I happen to be out of state] that I am no longer capable of making reasonable judgements in respect of matters relating to all or any part of my estate….” (Quotes are from Rocketlawyer.com.)
The powers granted are broad. The agent can make banking and business decisions, gain access to accounts, and make decisions concerning any pending litigation, property, tax matters, government benefits, and more.
I can revoke it at any time up until incapacity, and the document does not give my agent the power to make decisions regarding medical or healthcare issues (I implemented a Living Will for that).
Different states have different requirements, but in Florida I was required to have the document witnessed by two individuals (not related) and then notarized.
I could have hired an attorney to prepare the document for me, and that might be the right choice for others. Instead, I chose to find the document online for free. A simple search presented me with sites providing state-specific documents, along with state-specific directions, and I decided that was all I needed.
With the document signed, notarized, and safely filed away, I felt more at ease going into surgery. Thankfully, two weeks later the surgery seems to have been a success and the document wasn’t needed. But for now it remains in my file cabinet just in case.
Thank you for this important reminder that we need to protect out businesses and ourselves.
And I am so glad your surgery went well and you are on the road to recovery.
Thanks, Yvonne. Truthfully I’d never thought too far into the future until the surgery came up. Now I definitely feel more prepared!
So glad the surgery went well for you and thanks for this reminder! I have a poa which I am about to update but I’d not thought at all about who should deal with the books, it might well be a different person! Very pleased to have read this.
Thanks, Carolyn. You know, back when I had a psychotherapy practice this stuff was easy – everything would fall to my business partner. Now it’s not quite so easy!
Good info to have in our back pockets. Sorry you had to go through all that, but glad you’re on the mend. It pays to be prepared.
It most definitely does – thanks, Melissa!
I recently had a simple will drawn up and included that my cousin (Executrix) would hold ownership to my copyrights. She would be able to continue to publish and promote any works plus receive royalties directly. I found this the least difficult for estate purposes (not that I have a big one lol). The power of attorney is a great idea, but it ceases once you do.
You make a really good point. I need to have a will drawn up. I’ve known that for years, but just haven’t gotten to it. If something happens to me I want my husband and kids to continue to receive whatever royalties I might make. Heck, maybe they could even go out to eat every now and then!
I hope the power of attorney (or durable family power of attorney) work better than they once did. Some places refuse to accept them. Otherwise, it’s a good idea having this protection.
In Florida, at least, they seem to hold some weight. Even more so the Living Will. (Remember the Terry Schiavo case from a few years back?) We were highly recommended to have one, to the extent that the first question asked by everyone during pre-surgery visits was, “Do you have a Living Will?” I didn’t initially, but all those questions made me think I should.
I’m glad to hear things have improved. When my father was in a nursing home in Tallahassee, many people refused to accept our durable family power of attorney. That was in the 1980s, so plenty of time for the document to gain strength. A living will is also a great idea.
Well, I *hope* they’ve improved. Luckily, we didn’t have to test it out! 🙂
Thanks for giving us all the heads-up about the need to protect what we have in case the worst happens. Having a will ensures that your surviving family members won’t have to jump through legal hoops at a time when they don’t need any additional stress. Without a will, they might not be able to access your safety deposit box or anything else until the estate is probated (not a lawyer, just saying.) In the case of having a business of your own, you need to protect your clients as well. It’s not something most of us like to think about, but it’s important. And the peace of mind is worth it.
I absolutely agree, Candace. It isn’t fun to think about, but it’s necessary.
It’s one of those things we know we need to do but put on the back burner. Good reminder not to leave it there. 🙂 Glad you are doing fine. Thank you for the reminder. Merry Christmas.
Thanks, Glenna, same to you!
Yeah, a power of attorney is important. I think they need to be updated, too. In your case, you had a reason for doing it, but it’s just as important to get one when you’re healthy, in case you end up unexpectedly incapacitated (which is probably the norm).
Very true – I wish I’d thought of it sooner.
Very clear and easy to understand. Thanks for this advice! As we age, the possibilities seem ever more looming. Don’t know where the time has gone, but it’s good to know how easy this can be. Thanks, again!
Thanks for stopping by, Katharine!
I have a herniated disc and bone spurs in my neck. I’ve had headaches and strange sensitivities to weather changes, noise, etc. for years. My joints began hurting in the last year or so when I stopped going to the gym. My neurosurgeon thinks I’m too young to have surgery, but I’m curious to know how you progress. Therapy helped and hopefully getting back into an intense fitness routine will help even more. You’ll be in my thoughts and prayers!
Thanks, Jeff, and I’m sorry to hear you’re having disc troubles. I had a herniation between C6-C7, with the addition of bone spurs because of all the trauma. It had gotten to the point I couldn’t function – couldn’t go to the gym, couldn’t work in the yard, couldn’t do much of anything – even type (yikes!). I’m 48, for what it’s worth. And if it gives you any hope, I had immediate relief from the nerve pain post-surgery. Best of luck to you! 🙂
Mine is between C4-C5. I had lots of problems the last year before I knew the issue was neck-related and not neurological. At least now I know to manipulate my neck. I’m glad to hear your surgery went well. Thanks!
I’d always wondered about this, as I begin my writing career. It’s vital business information for any serious author. It’s not just good to make money from what you love; it’s also necessary to know how to manage it. Thank you, Melinda!
Glad it was helpful, Alejandro – thank you!