In Ohio, there are many issues that must be addressed during probate and estate administration. In general, this is related to the person—the decedent’s—property, how it will be distributed and all their affairs settled. For business owners, there may be concern as to its operation immediately after they have died.
Since a business is frequently the sole source of income and its continuing to operate is important to family members, customers and possibly the community, there are ways for the executor or administrator of the estate to continue operating the business after the person’s death. It is important to understand the law for these matters.
What does the law say about a business continuing after a person’s death?
According to state law, the business can stay in operation for four months after the executor or administrator is appointed. This is contingent on the contents of the will. The executor or administrator will not face any losses as part of overseeing the continuation of the decedent’s business during this time.
The court can also extend that time after holding a hearing and giving notice to the heirs—the spouse and those who are receiving property from the will or other estate planning document. It is important to note that there can be no loss to the estate beyond assets that were used for the business right before the person died unless the court gives approval.
While the business remains in operation, the executor or administrator will be required to file reports to the court every month. In this report will be the income and expenses of the business from the past month. Other information that could be important must also be included in this report. The estate cannot be bound by the executor or administrator without approval from the court.
The business must have been a sole proprietorship owned by the decedent. That does not include businesses in which they might have been shareholders, part of an LLC or any other business entity apart from a sole proprietorship.
Avoid mistakes during probate and estate administration with qualified legal help
A person might view their business as a legacy and need it to keep going after they have died. There can be financial, personal and legal ramifications if they do not do so. This can be addressed as part of the estate plan and executors and administrators must be fully cognizant of what this means. For this or any other concern related to probate and estate administration, it is vital to have empathetic, experienced and comprehensive assistance to address any challenges that might arise.