“When a small business owner dies with an active amortized loan, the debt does not vanish. The balance remains an obligation of the business entity and a valid claim against the owner’s personal guarantee and estate”, the Small Business Administration website explains. Even when a business has multiple owners, if just one of the guarantors dies, the bank could call the loan, as Evansville attorney Terry Farmer cautions.
At Geyer Law, we know it’s literally never too soon to give thought to business success planning, anticipating, well in advance, the answer to the question of how the business will respond to the death or disability of one of the owners. As Attorney Cara Chittenden explained in an earlier post, ” With planning, everyone has advance notice of what the plan is and what their role is likely to be.”
Thing is, even for the smallest of businesses, there are aspects of business law – and estate planning — that need to be considered from the get-go, including thinking ahead to that someday in the future. That’s because, as we explain to Geyer Law clients, your business is not only going to be about you; it’s going to be about your employees, your customers, your family members. From Day 1, the possibility of any business partner or key employee leaving (to go elsewhere, or because of illness or death), must be considered.
Wisconsin attorneys Hollman DeJong & Laing sum the matter up nicely when they recommend that business owners create a buy-sell agreement as soon as the business is formed. ‘It’s a lot easier to get an agreement in place when everyone’s in agreement.'”
At Geyer Legal, in addition to helping clients select the right business entity for their needs (sole proprietorship, LLC, corporation, or partnership), we help create buy-sell agreements and appropriate succession planning. We realize that business succession planning is the first order of business!.
– by Nicole Eckert , Attorney with Geyer Legal Group
