Your loved one’s business may have been one of their most significant assets, and it’s possible that their estate plan or business succession plan explains what happens to the business when they die. However, it’s possible that no plan exists. The business may have started after an estate plan was developed, or the business owner may have died intestate. In any of these scenarios, a successful succession must include a fair valuation of the business and distribution to the lawful heirs.
Include the Business on the Descriptive List of Assets and Liabilities
A Louisiana succession lawyer will file pleadings to open a succession in court. These pleadings include:
- The Petition for Possession which describes the key facts about the succession case such as the identity of the decedent, whether there was a will or the decedent died intestate, and the identity of the known heirs.
- The Affidavit of Death, Domicile, and Heirship which acknowledges the truth of what is in the Petition for Possession.
- The Sworn Descriptive List of Assets and Liabilities which includes, describes, and lists the fair market value of the decedent’s assets at the time of death. In some cases, debts or liabilities are also included. An heir or an interested party to the succession must sign it. The Descriptive List of Assets and Liabilities is a critical step in the succession process because the court’s ultimate Judgment of Possession will be based on the content included in the Descriptive List of Assets and Liabilities.
- A Renunciation of Donations. If any heir wants to reject their succession rights, a Renunciation of Donations must be filed to alert the court.
- The Judgment of Possession which explains who gets what when the succession case is finalized.
A decedent’s business interests are typically first included in the Descriptive List of Assets and Liabilities and then in the Judgment of Possession. Generally, the decedent’s business interests are included in both documents unless the business or estate plan was structured in such a way that the business would pass to new owners outside of the probate process.
Potential Business Issues During Succession
If the business is included in the Descriptive List of Assets and Liabilities and part of the succession process, the following issues could arise:
- Business operation interruptions. Your loved one’s death may impact daily business operations. Client and customer needs must be met, salaries must be paid, rent must be paid, and other short-term business operations must continue. A prolonged conflict and uncertainty about business succession could impact current business operations.
- Business valuation disputes. The business is likely a large part of the succession estate. However, its fair market value can be tricky to calculate. Experts may be required to determine the value of the business.
- Business continuation conflicts. Without a business succession plan, heirs may disagree about what should happen with the business.
Any of these issues may have financial consequences and may jeopardize the business that your loved one worked so hard to build.
A Louisiana Succession Lawyer Can Help
Each year, our experienced New Orleans succession attorneys help hundreds of families throughout the State of Louisiana resolve succession issues. We know what issues to anticipate and can help you by:
- Identifying the issues that may affect your loved one’s succession case
- Giving you our legal opinion about what may happen with your loved one’s business and any other succession assets
- Providing you with all of your succession options, so you can make informed decisions about what to do next
- Representing you in court to make sure all of your rights are protected
We invite you to begin learning more about your rights today by calling us or completing our contact form to have someone from our Louisiana succession law firm contact you.