Probate Pitfalls
The legal process that takes place when a business owner dies without a will or a succession plan.
What is Probate?
If a business owner dies without a succession plan, this person is appointed to oversee the estate.
Who is an executor or personal representative?
Probate costs can take up to this percentage of an estate’s value.
What is 3-8%?
This legal document outlines who takes over a business if the owner passes away.
What is a business succession plan?
A succession plan allows the business to avoid this common probate delay.
What is court approval for decision-making?
The average duration of a Probate in CA.
What is 1-3 years?
A probate court may appoint this person to run the business if there are disputes among heirs.
What is a court-appointed administrator?
Business assets in probate can be subject to this type of tax.
What is Estate Tax?
A business succession plan can name this person to take control immediately.
Who is a successor or designated owner?
Having a succession plan can protect this critical part of the business.
What is goodwill, relationships, or reputation?
Probate proceedings are handled in this type of court.
What is Probate Court?
If there are multiple heirs, they may face legal battles over this key business element.
What is ownership control?
A lack of liquidity in a business can force heirs to do this to pay probate costs.
What is sell company assets or take out loans?
This type of agreement protects business partners when one owner dies.
What is a buy-sell agreement?
This insurance policy can help fund the transition of a business to new owners.
What is key person insurance or life insurance?
This costly factor often reduces the value of a business going through probate.
What are legal fees and court costs?
If no family member wants to take over, the court may decide to do this with the business.
What is liquidate or sell it?
High legal fees are necessary in probate because of these two major reasons.
What are Court Fees, Attorney Fees, or Executor Fees?
This type of trust can help a business avoid probate altogether.
What is a revocable living trust?
A family business succession plan can prevent this financial burden on the next generation.
What is forced asset liquidation or excessive taxes?
The reason employees and customers may leave a business during probate because of this uncertainty.
What is lack of leadership and decision-making authority?
Without a clear succession plan, this important person might leave the company due to uncertainty.
What is a key employee or manager?
Probate delays and legal fees can lead to this unfortunate business outcome.
What is bankruptcy or business closure?
A well-structured business succession plan prevents this common legal battle among heirs.
What is a dispute over ownership and control?
With a solid succession plan, the business can transition smoothly and maintain this essential element of success.
What is stability and continuity?