Who Acquires Control Of Your Business Interests if You Don’t Have a Will?
Who inherits your business if you die without a will?
Planning for death includes thinking about your business interests. With effective planning, our Florida wills lawyer (s) can determine:
- Who owns your business after you die
- Who will initially run your business when you pass away
- How the value of the business is determined
- What taxes will likely be due
- Many other control and practical issues
The intestate laws of Florida
If there is no will, then the business control issues are determined by the intestate laws of Florida. The intestate laws favor selling the business. The proceeds are then divided among your heirs. So, if you want the business to continue in the hands of a relative or anyone – the intestate laws won’t help you. Anyone who wants the business will need to buy the business from the heirs.
Without a will, your financial assets including the business are distributed as follows:
- You have a spouse but no children or descendants. The wife gets the net proceeds. The net proceeds are the sales price – the taxes, administrative costs, and debts.
- You have a spouse and children or descendants. First, the wife gets half, and then the children/descendants get half.
- You have children/descendants but not spouse. Generally, each child gets a proportional share. For example, if there are three children, each child gets a 1/3 share.
- You only have aunts, uncles, siblings, nieces, or nephews. Generally, the intestate laws try to leave your assets to any living relative. Your estate planning lawyer can explain which relative get what share and how much.
Descendants include children, grandchildren, and great-grandchildren. Determining which relatives have rights is complex. Therefore, you need to review with a wills lawyer what happens:
- If the children are stepchildren, half-children, adopted children, or children born out of wedlock
- You get divorced
- Your spouse has other children
- You have children from a prior marriage
Business interest exceptions to Florida’s intestate laws
Some business interests pass to another person even if there is no will.
- Life insurance proceeds are payable to named beneficiaries. Life insurance proceeds can be used to buy the financial interest in a business.
- Any jointly held assets. So, if you own your business jointly with your spouse, then your wife gets your interest in the business
- Trust assets. The trusts terms control the distribution
Most business owners who are in partnership with other owners created a partnership agreement. Whether you have a will or not, the partnership agreement should determine what happens to the business – after you die.
For corporate interests:
- If you own stock in a company, then the stock passes to a named stock beneficiary. In the event the stock does not name a beneficiary, then the stock is distributed according to the Florida intestate laws.
- If you had a shareholder agreement, then the shareholder agreement normally controls – will or no will.
- The corporate bylaws also control business succession – will or no will.
Also, there are other legal documents that may control business interest. A buy-sell agreement is a common example.
Don’t wait to talk with an experienced Florida will lawyer
You never know when a heart attack or tragedy may take your life. At Lulich Attorneys and Consultants, our wills and estate lawyers help business owners plan for the time they can’t run their business. We have been helping business owners and seniors for three decades.
Understand how a will and other legal documents can protect your business and the dreams for your family. You can contact us by calling 772-589-5500 (Sebastian) or 772-774-7771 (Vero Beach) to schedule a free consultation.