Will Your Business Survive When You Die?


Everyone dies. ( Even in the state of Indiana, as blissful as it may be.)

Entrance to the Other Side

Not everyone will have a business when they die, but those who do have a business, especially those with a small business, will want that business to continue to thrive and supply the family with income and to give a legacy to the founder. The sad reality is that many businesses are so tied to the individual, they do not survive. Another reason is that the individual who actually owns and operates the company never took the time to consider what needed to be done after he or she died, so there are no instructions, no plans in place, and often, no life insurance proceeds to inject funding into the business to weather the crisis of the owner’s passing.


Have you considered whether or not your small business will survive without you? If you own a large business, then typically, there are things in place, officers in the corporation and employees who will be able to run things fine without you. But, most small businesses are run by one or two people, and when they go, the business goes. There are ways to prevent that, but those things have to be put in place now. One important  move is to put in place some “key employee” insurance making sure the business is the beneficiary. Another thing one can do is to begin training someone now to take your place.These are only a few things that can be done to insure your business survives your death.

Stop and think for a moment of all the little things, the myriad of things that absolutely must be done in the business. Ask yourself these questions: Who would do this? Would they do these things? Do they even know to do these things? How can I make sure someone does them?

There are ways to implement your wishes so that the business thrives without you. But, like effective estate planning, these are things that must be done now, not while you’re on your death bed. Otherwise, you’re going to have an estate nightmare where not only are there serious questions about who gets what, but what should be done with the business, which is now part of your estate. If there is a will contest, or if there are undecided questions as to what should be done with the business, then it falls into the lap of the probate court to decide what should be done with your small business. Is that what you want? Not likely.  It is possible that you could disinherit your  children and instead of them getting your business, as you assumed, someone else would get it.


If there is a partner involved, you’d better have the proper paperwork in place before you die. Review it with your attorney to make sure it is all correct, and that it does what you think it does. I can’t tell you how many times I have had a client come in with a contract or document, tell me what they thought  it meant, and then after reading it, discover that it meant something entirely different than what they thought. This is especially true of agreements that are done privately, between the parties. Lawyers realize, because of their training, that some words are very significant and have legal meaning, and that some terms must be clearly spelled out in a document. A lay person, even sophisticated business people, often miss important terms or misunderstand the legal significance of a particular word or phrase.


Sit down with your lawyer and go over the legal issues that will certainly arise after your death. Have your attorney draft documents that become ironclad guarantees that certain policies will be enacted and followed after your death. Incorporate these wishes into your estate documents as well, so it is crystal clear what you want done with the company after you pass on. It is not enough to simply pass the business on to a loved one. They may not be capable (or willing) to implement your desires and policies. You need some safeguards in place.

Here’s is an interesting Fox article on the issue:

Will Your Small Business Live if You Die?

By Donna Fuscaldo: Protecting Your Small Business
Published May 04, 2012

It’s not an easy thing to consider, and for many small business owners, little thought is given to what will happen to the business in the event of their death. Many assume the next of kin or partner will take over. But without planning and forethought, the business could end up in probate, potentially creating irreparable damage.

“When you pass away there’s a lot of questions left up in the air,” says Brooke Borg of Borg Law Group. “If it goes through probate it could hold up the business and affect the bottom line.” Even if everyone agrees the small business will get passed to the next of kin or partner, without an estate plan (will and/or trust), the business will be held up in probate at least for a small amount of time.

According to legal experts, a small business owner should start estate planning as soon as the business is making a profit. Rocket Lawyer, the online legal service, surveyed small business owners and consumers and found that 69% of owners say estate planning is important to ensure the assets get passed down properly while 44% say it’s most important to avoid family disputes. Read more:



Below are some sites that can give you some helpful information...

Small Business
Prenuptial agreements: Unromantic but important - USATODAY.com
nursing home abuse attorneys1 | Flickr - Photo Sharing!

Related Posts:

Rosa Parks Estate is Settled – The Rich Often Leave Wars Behind

Estate Wars Are Real Battles

There have been some rather famous estate battles in our nation over the years dealing with the probate of an estate. Most of us recall the long, ardous battle waged over the reclusive billionaire Howard Hughes’ estate. And, who can forget the brawl that went on for so many years involving the now deceased Ana Nicole Smith. Now, another very famous and very dead person has people settling their brawl over her estate. Rosa Parks, the famous civil rights leader’s estate is being settled.

By David Ashenfelter The secret legal agreement designed to settle the brawl over the estate of civil rights leader Rosa Parks is a secret no more. The confidential seven-page document — signed by Parks’ 15 nieces and nephews, Parks’ longtime friend  and caregiver Elaine Steele and an official of the institute Parks and Steele founded — turned up in a Jan. 18 filing with the Michigan Supreme Court. The agreement — struck during a late-night bargaining session in February 2007 in order to avert a trial in Wayne County Probate Court — spells out how the parties are to divvy up the proceeds from the sale of Parks’ belongings, said to be worth up to $8 million because of their historic value. Read More…

Many FaJohn Waynemous People Leave a Legacy of Estate Battles

The kids of actor John Wayne are fighting over his estate. Billionaire Melvin Simon of Indianapolis, Indiana, apparently did not have a will sewed so tightly as to preclude any litigation. Across the land, families have drawn battle lines and waged war with each other over who gets what from mom or dad’s estate. The interesting part of it all is that you’d think that rich people would have sense enough to make their wills iron-clad so as to be inviolate and immune to the petty bickering that often erupts amongst family.

But, that may not be possible. While it is important that you have your wills drafted carefully, the unfortunate thing is that greedy people will always do what greedy people do: they will try and get everything they can. It is not uncommon for a brother to want his sister’s share. I have known of cases where a family member literally stole a deceased parent’s entire estate. Sometimes, they got away with it simply because the other siblings were not as greedy and did not want to fight (or in some cases, could not afford a lengthy court battle).


Below are some sites that can give you some helpful information...

will contest
Respect Your Elders
Estate encyclopedia topics | Reference.com
Comments: Estate Planning: Inheritance Nightmares Squander ...

Related Posts: