After a hospital stay, you return to payroll approvals and unsigned contracts. Recovery may bring relief, but those papers can raise questions about who would take charge after your death.
If you are nearing retirement with substantial business interests, a medical condition can make succession feel urgent. Part of that planning often involves deciding who will take charge during probate, the court process for settling your estate.
Knowing who holds control during that process may help you assess your plans. The following people could manage your ownership interest or run daily operations.
Your court-appointed personal representative
When your ownership interest enters probate, your personal representative can manage it for the estate. The court appoints an executor under your will. In Tennessee, that person needs authority under the document or court approval to operate the business directly. If your will allows it, the court may grant permission for up to nine months from the appointment date. A judge can extend that period for good cause.
If you operate as a sole proprietor, you own the business assets directly. Your executor may handle that property and related debts, seek approval to keep trading or arrange to sell or close.
Your surviving managers, officers or partners
Your business structure and company rules may determine who runs daily operations. In a corporation, directors generally oversee the business, while officers handle routine tasks. In other business structures, limited liability company (LLC) managers or surviving partners can act within the powers their agreements and the law allow.
Your company’s president could keep paying suppliers while your executor handles your shares. Your executor could also vote on company decisions, subject to its agreements and the law.
If you own and manage a single-member LLC, succession involves both roles. Under the revised LLC law, your personal representative generally takes your place as a member. Company documents may name someone else or set terms for closing the business. The operating agreement can set separate rules for choosing a manager.
Your remaining owners under a buy-sell agreement
Your co-owners may purchase your stake under a buy-sell agreement, which sets terms for a sale after events such as death. Its pricing method and payment schedule can guide what your estate receives and when. The transfer could shift control to the buyers.
Why you need a coordinated succession plan
A coordinated succession plan can reduce conflict between the people who inherit your wealth and those who make business decisions. Discussing their roles may help address family expectations before disputes arise.
Gather contracts and list the decisions you currently handle yourself. An estate planning attorney can review those duties alongside your asset-protection and tax goals, with input from your accountant.