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  1. #1
    Join Date
    Mar 2008
    Posts
    176

    Question Inheritance of Business Ownership

    My question involves business law in the state of: PA

    I hate to make this long but want to get all the words in so someone help me with this.

    mom and dad own small business. business is incorporated and both mom and dad die within 6 days of each other. The will states the following:

    Business Powers: if at any time of my death, i am engaged in any business or am the owner of any business interest, whether such business is conducted as a proprietorship, partnership, corporation, or in any other form, I give to my Executors the following additional powers:
    1.to retain the business interest, without liability for any loss, for such period of time as they, in their absolute discretion, deem appropriate, without regard to whether such business interest is producing income, and notwithstandy any law or provision that might otherwise require verification.
    2.to continue the business, without liability for any loss, for such period of time as they in their absolute discretion, deem appropriate, and to invest in such business other assets of my estate or any trust hereunder.
    3. to direct, control, supervise, manage, and operate the business: to borrow money and pledge the assets of the business, or of my estate or any trust hereunder, for any purpose: and to sign binding contracts.
    4.to delegate managterial authority to others, whether by means of employment agreements or other arrangements, and to enter into voting trusts, or grant irrevocable proxies, as they, in their absolute discretion, deem appropriate.
    5. to act as officer, partner, director, manager or employee of the business interest, and to exercise all rights of ownership for the election or appointment of any person, including any Executor hereunder, as director, officer, manager or a similar position, and I hearby exempt my Executors from the adverse operation of any law or provision that might otherwise prevent them from exercising the powers hereunder by reason of a conflict of interest.
    6. to vite the shares of any business interest conducted as a corporation.
    7. to engage, compensate and discharge such manager,s employees, agents, attorneys, accountants, consultants, or other representatives as may be deemed advisable, including anyone who may be a beneficiary or a fiduciary hereunder, and to delegate authority to such persons.
    8. to organize a corporation, partnership, or any other form of business entity, under the laws of any state, and to transfer thereto all or any part of the assets of the business or of my estate or any trust herunder, and to receive in exchange such shares of stock of one or more classes, such bonds or other obligations of the corporation, or such interest in the partnership as may be deemed advisable in order effectively to carry on the business or a business in a similar or related line of activity.
    9. to sell or liquidate all or any part of the business at such time, for such prices, on such terms, with or without security, and to such persons as they, in their absolute discretion, deem appropriate, notwithstanding any law or provision that might otherwise prohibit such transaction by reason of self-dealing or conflict of interest.
    10. to consent, or decline to consent, to the election of S corporation status as provided in the I.R.C.; and to elect, or to request the revocation of the election, to qualify any trust hereunder as a qualified Subchapter S corporation trust or as an electing small business trust, as provided in the I.R.C.
    -
    son was named executor and daughter was named as beneficiary!!!!

    So my questions are:
    1. does daughter have any say, ownership, or right to any of the business?
    2. brother is trying to get estate to pay business for a personal loan mom took out before she died. the loan was from the assets (money in the bank) of the business and not through a bank or anything else. Is the estate liable to pay that loan back? or is that something that the new owners just have to eat and write off?

  2. #2
    Join Date
    Sep 2005
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    Behind a Desk
    Posts
    98,846

    Default Re: Inheritance of Business Ownership

    Until the heirs actually inherit an interest in the business, they have no ownership interest and thus no say in the operation of the business (except as outlined in any applicable will or trust).

    Who is opposing the repayment of the business debt, and on what basis? The business is incorporated, so it's a separate entity and can make a claim against the estate for money owed to it.

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