You may have always had that entrepreneurial spirit and started several businesses. Or perhaps this is the first and only business that you own. Either way, being a sole proprietor of a business means you alone must decide what will happen to your company after you pass away. Sole proprietorship and estate planning should go hand in hand – if you have a small business, you need an estate plan.
Being a sole proprietor means you own an unincorporated business by yourself. You may have employees, but you are the only owner (you don’t have partners or a boss). Owning a business by yourself means that all responsibility for the company falls on you. This can be daunting, especially if you have employees. A succession plan will help those left behind understand how you want them to handle your assets after you’re gone.
There are basically 2 options for a business when the sole proprietor dies:
What happens to a sole proprietorship when the owner dies?
When the business owner dies, if there was no estate planning, all assets and debts are settled through probate courts along with your personal assets and debts. If you pass away before you have written a will or established a trust, your business assets will be distributed according to Illinois state law. This means it will be divided among your relatives.
Working with an experienced estate planning attorney now will save time, money and stress for your loved ones left behind. You have worked hard to start and run your business – and you should put that same determination into planning what will happen to it when you’re gone.
As a sole proprietor, making a will is crucial. An experienced estate and probate lawyer can guide you through the process, so you don’t overlook anything. And you can be sure that your will complies with Illinois probate laws.
To talk to a probate, trust and estates attorney. Contact the Estate & Probate Legal Group at (630) 864-5835
AREAS WE SERVE: Cook, DuPage, Kane, Lake and Will counties