When you pass away, you hope that the company you have built from the ground up will be run by an heir that is capable. In fact, you have probably even willed the company to the most capable of your children. However, even the best-laid plans can go sideways. Without putting very specific details regarding the family business into your will, all of the following can occur.
Heir or Heirs That Do Not Stand to Inherit the Company Suing for Part or All
The biggest possibility is that whichever heirs you do not leave the company to may sue for part or all of the company. This happens a lot when there are more than a couple of siblings and you have only left the company to one. The other heirs may think that they should have at least part of the company.
Sometimes an heir may think that the entire company should be in his/her hands and that the will is wrong. Business attorneys get involved, helping the one heir defend his/her inheritance against the litigations of the other heirs who think that they are owed a piece of the company pie. As you fill out your will, seriously consider hiring business litigation services that will best advise you on how to word the will so that there is zero room for interpretation on what you wanted and why you wanted it. Just explaining in the will your reasons for only willing the company to the one heir and making sure those reasons are clear and reasonable can prevent legal issues among or between your heirs after you are gone.
Passing Away After Business Lawsuit Names You, but the Company Is Passed to Heir(s)
This is a big problem, no matter how you look at it. If a lawsuit is brought against you before you pass away, and you pass away before the lawsuit is resolved, then the company passes to your heir(s). Now your heir(s) have to deal with the lawsuit, and in most instances, unless the original lawsuit names them or includes them in legal language, the current suit is dismissed and a new suit is brought against your heir(s). However, this type of business litigation gets very messy very fast, and if the lawsuit is against you personally, there is nothing that can occur against your heir(s). Your company can still be sued, but not until new court documents have been filed. Your heir(s) in this situation will have to hire their own lawyers, rely on company lawyers, and/or figure out how to manage this situation.
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