Legal Question in Wills and Trusts in Pennsylvania
owner/operator of family business, no will, debt left
A frien just lost his father two weeks ago. The father owned and operated a paving business. There is no life insurance or will. The business is in debt. The family home has two morgages. His mother is emotionally unstable. So everything is falling onto my friend. We have been told that if his father was the only name on credit cards that the companies need to be notified in writing that there is no will and no estate and that no one will be responsible. Is this true? Also does it work for the debt of the business if his father was the only name on the business? Or is my friend responsible because he wants to continue the business and try to make a go of it.
1 Answer from Attorneys
Re: owner/operator of family business, no will, debt left
Your friend needs to consult with a knowledgeable estates and business lawyer. This is a complicated situation, and he should not just plunge in alone.
Liability of your friend's mother for the father's business depends on how the business was structured (e.g., sole proprietor, corporation, other). Similarly, if she was on the credit cards with your friend's father, she may have personal liability for that debt.
The children should not be personally liable for the business debt or the credit card debt. An exception may be if your friend was an officer of the paving business entity.
The credit card companies should be notified if only the father was the holder of the credit cards.
It is possible to administer an estate as an "insolvent" estate, but your friend should have legal guidance for that, and also should be properly advised about undertaking liability for a business that is heavily in debt.
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