The process of settling a deceased person’s estate (probate) can be complex under any circumstances, but when businesses are involved, additional challenges can arise.
Here are three matters that can complicate probate when it intersects with business interests.
1. Unclear business ownership and succession
If the deceased owned a business, questions about who will succeed the decedent can cause delays. A well-structured succession plan can simplify probate, but in its absence, disputes among heirs, partners or shareholders may emerge.
Without clear directives in an estate or business succession plan, Texas courts may need to intervene to determine ownership rights, potentially disrupting operations.
2. Valuation and financial disputes
Properly valuing a business is essential for proper estate administration, yet determining its worth can be complex and contentious. Disagreements between heirs, creditors and business associates may arise regarding asset valuation and liabilities.
If beneficiaries cannot agree on how to distribute or sell business assets, probate proceedings may be prolonged. Additionally, outstanding debts tied to the business must be settled before the estate can be distributed, often creating further legal and financial challenges.
3 .Operational continuity challenges
Keeping a business running smoothly during probate can be difficult, especially if key decision-makers are unavailable. Texas probate laws dictate how assets are transferred, but interim management throughout probate may be required to prevent losses.
Disruptions in leadership, lack of access to bank accounts and uncertainty over contracts can threaten the stability of a business. A well-documented estate plan can help mitigate these risks and promote continued success.
To create a sound estate plan that addresses business succession, seek experienced legal support. If you are concerned about the future of a business during probate in Texas, seek information and guidance from a knowledgeable source.