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What Happens to a Business When the Sole Proprietor Dies?
When the owner of a sole proprietorship dies, the business does not dissolve. It is automatically transferred to family members or other heirs. -
Estate Planning for Sole Proprietors
If a sole proprietor has wishes or goals regarding the distribution of their business assets at death, a well-thought-out written estate plan is imperative. -
Can a Sole Proprietorship Be Transferred After Death?
When the owner of a sole proprietorship dies, the business legally dies too. Assets could sell as a going concern or piecemeal. If it’s a corporation or LLC, it continues existing and keeps assets.
All business assets and liabilities become part of the sole proprietor’s estate. The executor must settle the estate. This includes dealing with the sole proprietorship. If the proprietor has goals for distributing assets when dying, an estate plan can help.
Through a will, the owner’s wishes can be carried out, and title to personal assets used in the business can transfer to the person taking over.
Heirs may elect to sell the proprietorship as a going concern after death or sell individual assets. With planning, contact an attorney to review your plan. We can help think through goals and desires.