What happens to my business if I die without a will?

On Behalf of | Jan 16, 2025 | Estate Planning, Wills

Building a successful business takes years of dedication, hard work and personal sacrifice. As a business owner, you want to ensure your legacy continues even after you’re gone. But what happens if you pass away suddenly without a will or clear instructions for business succession?

How Oregon law handles your estate

When you die intestate, or without a will, state laws decide who gets your property. Most of your assets will go through probate unless they are exempted, like with transfer-on-death accounts.

Oregon’s intestacy laws create an automatic chain of inheritance based on your closest living relatives. Your spouse typically inherits your entire estate if you have no children. If you have children from another relationship, your spouse gets part of your estate while your children get the other.

Your business type affects what happens next

Different business structures face different outcomes when the owner dies without a will:

  • Sole proprietorship: The business itself ends when you die, but your business assets become part of your estate and pass to your heirs through intestacy laws.
  • Limited Liability Company (LLC): Operating agreements usually include succession plans. If you have a multi-member LLC but no succession plan, your ownership interest goes to your heirs while other LLC members may continue the business. But if the company is a single-member LLC, it will dissolve, similar to sole proprietorships.
  • Partnership: The partnership agreement determines what happens. Many partnerships dissolve when a partner dies unless the agreement says otherwise.
  • Corporation: Your shares pass to heirs through intestacy, but the corporation continues operating with the current executives running the business.

Note that these are just the basic rules. Your business may also get into complex situations, especially if multiple heirs may inherit your business interests.

Protect your business legacy with an estate plan

Your spouse or children may continue operating your Oregon business after your death, but they need proper legal authority. State laws might force them to sell the company if they lack qualifications or necessary licenses.

Wills aren’t the only way you can ensure the survival of your business. Speaking with an estate planning attorney can help you create a solid estate plan that protects your business succession and loved ones’ interests.