Owning a business is challenging – there are endless responsibilities from managing employees to filing taxes, overseeing operations, and keeping customers happy. But there’s one responsibility many business owners overlook: planning what happens to their business when they die.
If you’re a business owner in Illinois, your company isn’t just your livelihood – it’s part of your legacy. So what happens to your business during probate? And how can you protect your company and your loved ones after you’re gone?
Here are answers to common questions Illinois business owners ask about probate and estate planning.
Probate is the legal process of settling your estate after your death. It involves validating your will (if you have one), paying debts and taxes, and distributing your remaining assets to your heirs.
In Illinois, probate for a personal estate can take 6 to 12 months, or longer if the estate is complex. If your estate includes a business, the process may be extended – especially if there’s no clear plan for what happens next.
Why Business Owners Need a Succession Plan
A succession plan outlines how your business will operate if you become incapacitated or die. It names who will manage day-to-day operations and identifies how ownership will transfer. This is essential to:
Without a succession plan, the court and executor may be forced to make decisions that don’t align with your wishes – or your business’s best interests.
Consider Using a Trust
A trust can be an effective tool to keep your business out of probate. By placing your business interest into a revocable living trust, you retain control during your lifetime, but upon your death, the trust can:
If you don’t have an estate plan in place, your business may be liquidated during probate to pay off debts and distribute assets under Illinois intestacy laws. This could result in your business being:
If you have partners or co-owners, a buy-sell agreement is critical. This legal document lets your co-owner buy out your interest, often with life insurance proceeds or a pre-agreed formula, ensuring your heirs receive the value of your share while allowing the business to continue.
Without a Plan? The Court Decides.
If you haven’t documented your wishes, the court may appoint someone unfamiliar with your business to make decisions. This could lead to:
Avoiding this uncertainty requires proactive estate planning.
Yes – but only if you plan ahead. If your estate plan includes a clear succession plan and assigns a knowledgeable executor or trustee, your business can continue operating during probate with minimal disruption.
With a Succession Plan:
Without a Plan:
If your business is a sole proprietorship, it is legally indistinguishable from you as an individual. That means the business does not continue to exist independently after your death. Instead, all of the business’s assets and liabilities become part of your personal estate and must go through probate.
Without a will or estate plan, your family could face:
To avoid this, consider converting your sole proprietorship into a legal entity like an LLC or corporation, and include business transition instructions in your estate plan.
Yes – with proper planning, you can keep your business out of probate and minimize delays and court involvement. Options include:
These tools can provide continuity, privacy, and financial stability for your loved ones and employees—while protecting your business’s value and operations after your death.
Probate is always a complex process – but when your estate includes a business, the stakes are even higher.
At Estate and Probate Legal Group, we help Illinois business owners create customized estate plans that protect both their families and their businesses. From succession planning to trusts, buy-sell agreements, and probate guidance, we ensure your legacy continues the way you intended.You Need A Probate Attorney
An experienced probate attorney can help guide your loved ones through handling your business after you pass away. The lawyers understand the probate laws and can guide your beneficiaries through keeping the business running during probate or closing the business and selling the assets.
As an Illinois business owner, you have many questions concerning probate, and your loved ones will most certainly have questions when you die. Working with the same probate attorney can help make the process smoother.
As a business owner, you must have an estate plan. An experienced estate and probate lawyer can guide you through the process so you don’t overlook anything. You can also be sure that the trust complies with Illinois laws. To talk to an estate and probate attorney today, contact the Estate & Probate Legal Group at (630) 864-5835.
AREAS WE SERVE: Cook, DuPage, Kane, Kendall and Will counties
