29 Oct What happens to my husband’s business after death?
Q. My husband died intestate, leaving a company. Can my husband’s brother inherit the company?
A. We’re sorry to hear about your husband.
The term “intestate” is what’s used to describe when a person dies without signing a valid will.
Without a will, the deceased person’s assets are distributed under the state’s laws of intestacy, said Shirley Whitenack, an estate planning attorney with Schenck, Price, Smith & King in Florham Park.
Under New Jersey’s intestacy statute, the surviving spouse is entitled to inherit all of the assets of the intestate estate unless the deceased person had children from a previous relationship, Whitenack said. In that case, the surviving spouse and the deceased person’s children must share the inheritance.
Companies are more complicated than most other assets.
A person who owns a company actually owns shares of stock in that company. If a person who owns those company holdings dies without a will, the holdings will revert to the deceased person’s estate and will be distributed in accordance with the laws of intestacy, Whitenack said.
If your brother-in-law also owned part of the company, there may have been an agreement between the shareholders regarding ownership of the deceased person’s shares, she said. For example, there may be a buy/sell agreement in place whereby the surviving shareholder has the option and right to acquire the deceased shareholder’s shares from the estate.
You should get copies of all company documents that specify the rights and requirements of any other business partners and those who may inherit holdings from a deceased shareholder, she said.
If your brother-in-law didn’t have any documents with your husband determining what would happen to the company if one of them died and your husband’s share goes to you, you will have to work out a deal with your brother-in-law for him to buy your share of the company.
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