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Working Through a  Co-Owner's Death

Working Through a Co-Owner's Death

April 11, 2023

The death of a co-owner is a tragedy for many reasons. For many co-owned businesses, co-owners are also close friends. What makes the suffering worse is when the death of a co-owner hurts the business in the months and years after the death. It not only makes it nearly impossible to mourn and heal but also affects the surviving owner’s family, employees, and future. 

In the face of a co-owner’s sudden death, how can you quickly prepare the company for a sale? Here are a few steps you can take. 

1. Keep financial security in mind  

Before you take any actions to sell after a co-owner’s death, determine whether a company sale is in the best interests of your financial security. 

It’s crucial to remember that the most important aspect of planning for a successful future is achieving financial security. If at all possible, it’s prudent to take steps that allow you to continue to pursue that goal, even in the face of a co-owner’s untimely death. In other words, don’t sell your business short. 

If you aren’t sure what it would take to achieve financial security upon a co-owner’s death, consider contacting your Advisor Team. It’s too easy to make snap, emotional decisions in the face of a major loss. An Advisor Team can bring both expertise and level-headedness to the situation. 

2. Turn to your Business Continuity Instructions  

In a co-owned business, a strong strategy to address a co-owner’s sudden death is to turn to your written Business Continuity Instructions (BCIs). 

BCIs guide your Advisor Team, family, and surviving co-owners toward what they should do to protect the business and the decedent’s interests should a sudden death occur. These plans can also provide a path to sell the business for as much money as possible as soon as possible, which is a common strategy that surviving owners choose to consider. 

BCIs are different from a Buy-Sell Agreement. While a Buy-Sell Agreement may provide a strategy for transferring ownership upon a co-owner’s death, it may not provide guidance about how to keep the business functioning. This can have widespread effects on how, or even whether, the surviving owner can sell the business and achieve financial security. 

3. Lean on your next-level management  

A benefit of installing next-level management is that next-level management strengthens your business in the likely event that you and your co-owner(s) live long and prosperous lives. 

When an unexpected death occurs, next-level management can be the catalyst that drives a quick, efficient sale. 

It may be the case that, following your co-owner’s untimely death, you may not want to continue running the business. Instead, you may want to sell it as quickly as possible. 

A next-level management team can open the door to a quicker sale. That’s because the next-level management team is capable of running the business in the absence of the current owner. 


Following the death of a co-owner, it’s much more realistic to prepare for a quick sale if you already have plans in place. More specifically, having (a) knowledge of what it would take for you to achieve financial security, (b) BCIs, and (c) a next-level management team already installed are key to making preparations for a quick sale after a co-owner’s death more likely. 

However, if you don’t have these plans in place—or haven’t begun to consider these plans—it can be difficult, if not impossible, to prepare the business for a quick sale that allows you to achieve financial security. And with the added emotional toll the death of a co-owner can have, it becomes even more challenging to make objective longer-term decisions. 

We strive to help business owners identify and prioritize their objectives with respect to their businesses, their employees, and their families. If you are ready to talk about your goals for the future and get insights into how you might achieve those goals, we’d be happy to sit down and talk with you. Please feel free to contact us at your convenience. 

The information contained in this article is general in nature and is not legal, tax or financial advice. For information regarding your particular situation, contact an attorney or a tax or financial professional. The information in this newsletter is provided with the understanding that it does not render legal, accounting, tax or financial advice. In specific cases, clients should consult their legal, accounting, tax or financial professional. This article is not intended to give advice or to represent our firm as being qualified to give advice in all areas of professional services. Exit Planning is a discipline that typically requires the collaboration of multiple professional advisors. To the extent that our firm does not have the expertise required on a particular matter, we will always work closely with you to help you gain access to the resources and professional advice that you need. This is an opt-in newsletter published by Business Enterprise Institute, Inc., and presented to you by our firm.  We appreciate your interest. Any examples provided are hypothetical and for illustrative purposes only. Examples include fictitious names and do not represent any particular person or entity.