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Old 08-07-2016, 11:39 AM   #1
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Question for Business Owners

A neighbor recently passed away unexpectedly. Single and 60 years old. He owned a business which he had successfully run for over 20 years. I am curious what will happen to his business. Are businesses typically included in your personal will? Would the business typically have a succession plan in place for such an event? The only thing I know about the business is it is broadly categorized as specialty engineering.
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Old 08-07-2016, 11:43 AM   #2
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Without a succession plan, the business ends. How it is structured legally, Corp, sole proprietor, etc, will determine if there are claims against his estate. Did he have employees?
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Old 08-07-2016, 12:07 PM   #3
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Yes he had employees. Probably less than 25.
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Old 08-07-2016, 12:16 PM   #4
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Yes he had employees. Probably less than 25.
He may have had key man insurance so there are funds to help transition the business to another professional, but the devil is in the details. Just depending on what he did or didn't do.
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Old 08-09-2016, 05:19 PM   #5
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Thanks COcheesehead (is that a WI connection?)
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Old 08-09-2016, 05:49 PM   #6
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Thanks COcheesehead (is that a WI connection?)
Born and raised in Wisconsin, but Colorado is home now.
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Old 08-09-2016, 08:00 PM   #7
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I am curious what will happen to his business. If the owner didn't have a partner, the business would either be sold or go out of business and the assets sold to cover liabilities (including the tax man.)
Are businesses typically included in your personal will? Absolutely.
Would the business typically have a succession plan in place for such an event? If there is a partner in the business, they should have had a partnership agreement outlining how to handle the death of either partner.
The only thing I know about the business is it is broadly categorized as specialty engineering. Sometimes such business' biggest assets are intangible--like intellectual properties and their customer list. Hard assets would be working capital, computers, office furniture, etc., and they're easy to place a value upon. It's the intangibles that are difficult to place a value on.

Hopefully some of the employees would step up to purchase the business from the estate. These are difficult situations to place an executor of the estate.
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