Probate law impacts businesses because wills and estate plans could cause a shakeup in a company that that its owners were not expecting. You must be prepared for any business succession plans, family wills, and estate plans that could change the way your company functions. Use the tips below to ensure that you are not surprised by any probate actions.
Is There a Business Succession Plan?
You should contact a probate attorney when you need to create a business succession plan. You can use it to help the right people take over your company when you die. You need to create this plan with the appropriate people named on the document.
If employees or partners leave the business or die, you will have to change the names on the document. Moreover, you should ask your lawyer to word the document so that it cannot be challenged in court.
The Owner of a Business Passes the Business on to a Long-Lost Relative
The owner of a business might have passed it down to a long-lost relative who decides to close it, move the company, or sell some of the land, buildings, or both. When the new owner carries out the sale, your company might need to relocate. When a new person comes in, they can do anything they want with the business.
Probate law will create an administrator for the estate, and that person has legal documents that allow them to manage the business in any way that they want. Also, you should work with that person to learn what can be done to help your company move or get a grace period before it is forced to relocate.
The Debts from a Business or Estate Will Transfer
When you are the successor of a business, all its debts transfer to you. It is important to be aware of what the company’s total debts are when you take over, as well as any personal debts that could be assigned to the organization. You must also determine how you will pay off all the money owed.
Some people can pay them off from the profits of a business. If that is not possible, whoever inherited the company might have to consider selling it.
If you want to challenge the will in court, you may need to have yourself removed from the document. You may also have to challenge the debts that you are required to assume. This is a good way to prevent creditors from naming you as their new target. Additionally, some of the debts may not be legitimate.
Building and Facility Issues
If a relative who inherited the company after its owner died tries to evict you, you should check the lease carefully. Look for any clauses that allow or prevent him or her to do that. You might be pleasantly surprised.
This person could sell the building at any time, but they may have to wait because your lease does not allow them to sell the building while you are living or working in the property. If you have to protect yourself from legal action, do not try to do so on your own; get the help of a legal professional, i.e., a lawyer.
Conclusion
When you are ready to take over a business, it is important that you understand how its debts must be managed. If someone tries to sell a building you are renting, it is crucial that you know what your rights are. Additionally, you should work with an attorney to create a succession plan for your business. Put simply, you must be prepared for any problems that might arise and find ways to make sure that no major changes to your company or lifestyle due to probate actions occur.
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