Business Interests in Probate

When someone who owned a business, whether a sole proprietorship, a share of a partnership, or stock in a closely held corporation, passes away, that ownership interest becomes part of their estate and must be addressed during probate. Unlike a bank account or a piece of furniture, a business interest often comes with ongoing operational questions: Who runs the business while the estate is being settled? What is the ownership interest actually worth? And what happens to it in the long run: does it pass to a family member, get sold to a co-owner, or get wound down entirely?

Common Issues That Arise

Valuation — Business interests, especially in closely held companies, often require a professional valuation to determine fair market value for purposes of the estate inventory and any eventual sale or distribution.
Operating Agreements and Buy-Sell Provisions — Many businesses with multiple owners have agreements in place that dictate what happens to an owner's interest after death, including options for surviving owners to purchase the interest. These provisions can significantly affect how the estate handles the asset.
Management During Administration — If the decedent was actively involved in running the business, someone needs to step in, at least temporarily, to keep things operating, which can raise questions about authority, compensation, and liability.
Transfer vs. Sale — Depending on the decedent's wishes, the heirs' interests, and any existing agreements, the business interest might be transferred to a family member, sold to a co-owner or third party, or liquidated as part of winding down the estate.

How We Help
Beck, Payne, Frank & Piper, P.C. helps personal representatives identify what's involved with a business interest early in the probate process, including reviewing any existing operating agreements or buy-sell provisions, coordinating with the estate's accountant on valuation, and advising on the options available for transferring or disposing of the interest. We also work closely with any surviving co-owners' counsel when a buyout or transition is involved, with the goal of keeping the business stable and the estate moving toward resolution.

If a business is part of an estate you're administering, getting guidance early can help avoid disruptions to the business and disagreements among beneficiaries about its future.

Discuss a Business Interest in an Estate

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