loader image

How Do Businesses Change Hands After the Death of a Loved One?

Although nobody likes to think about their mortality, it’s important that they do. They have to think about those who are left behind, and this is particularly true when they are the owner of a business.

You Need a Succession Plan

How does it change hands after you pass away? Does it just fade away and no longer exist? Typically, it will end up going to your estate. However, it can depend on how your succession plan was created—or if you had a plan in place. In cases of a family business, it will likely go to whoever you named in your estate. The family member you name should be someone you feel is qualified enough to run the business.

Who this person is might change over time, which means you may need to update the plan when it’s called for. If you haven’t properly prepared a succession plan or updated it, the business may not go to the person you want it to.

What Happens to the business

When a business goes to the estate after you die, your executor will divide the assets according to your wishes. If the estate plan doesn’t address the business, though, it is going to end up creating some confusion, and you can be sure a lot of questions will arise.When a business goes to the estate after you die, your executor will divide the assets according to your wishes. If the estate plan doesn’t address the business, though, it is going to end up creating some confusion, and you can be sure a lot of questions will arise.

One of the options is to set up a trust, which can be overseen by a board of trustees. They can take care of the business until the children are old enough. Of course, you may want your kids to benefit from the business, but you may not feel as though they should operate the company, even if they are 18 or over.

If you have children who are under 18, they may be able to inherit and own the business. However, because of their age, they will not be able to handle certain business activities, such as signing contracts. When creating a succession plan, if you have minor children, you will also have to plan for the day-to-day operations of the company.

Talk with the attornies at Bell & Shah. We Can help get your estate plan in order, and to ensure you are setting your business up for success after you have passed away. Whether you are going to give the business to your children, a spouse, or someone else, take care of the legalities before it’s too late.

Share:

More Posts

Tips for a Successful Closing

With the Winter season coming quickly here in Chicagoland, you may be feeling the pressure to close that real estate deal. As you prepare to finalize your final purchase, take a moment to make sure you are setting yourself up

Working with an Attorney to Sell Your Home

If you are putting your home on the market, or if you are considering selling other real estate property, you are likely already working with a realtor. However, working with the right experienced attorney from Bell & Shah can make

How to Choose Your Durable Power of Attorney Agent

Completing advance directives is a responsible part of building your estate plan. Not only do you have the opportunity to dictate what matters to you at the end of life, completing certain tasks can give you control over who advocates

Avoiding mistakes when setting up partnerships

As established contractual relationships, Illinois partnerships can be difficult to untangle when things go wrong. When people are preparing to go into business with one another, it is important to take steps to avoid potentially costly errors if the partnership

Consultation Request

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Disclaimer

The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.

Disclaimer

The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.

We are committed to removing barriers that prevent persons with disabilities from interacting with or accessing information on our website. If you encounter any difficulty in this regard please let us know and we will make reasonable good faith efforts to fix the issue. 

Skip to content