MAKING ESTATE PLANS FOR A BUSINESS PROPERTY
Texas business owners may worry over cash assets, inventory and vehicles, but all of these things may come to nothing if the business literally has nowhere to operate. When a business owner dies, what happens to the real estate the business uses may become an issue. That is why business owners should consider what will happen to their business property after they pass away.
Forbes explains that the fate of business real estate depends upon who actually owns it. Some businesses, like corporations, are separate entities and possess their own real estate. Since the business owns the land and the building it operates in, ownership of the property is simply considered another asset of the business. So whoever gains ownership of the business will own the property as well.
However, there are many businesses that rent the land they use from another owner. If the property owner is also invested with the business and wants it to continue, the owner may provide for a successor owner to take over, someone who will keep the business on the property. The owner might use a will, or the owner could try to circumvent probate with joint ownership that assigns a right of survivorship to a co-owner.
Another way to transfer property is with a transfer on death (TOD) deed. According to Texas law, a person may create a TOD deed that conveys ownership to a specified beneficiary after the original owner passes away. A TOD deed should contain all of the relevant information of a normal recorded land deed and specify that it takes effect upon the death of the owner. Also, the owner should record the deed in the clerk’s office in the county where the property resides.
Questions involving what happens to business property involve many factors. It is possible that a business cannot operate on a property once the original owner passes, so the business owners will have to make plans to move it elsewhere. Even if the owner wishes to keep the business on the property, the owner will have to decide whether to try to avoid probate or not. These are important questions and may require the advice of an estate attorney to understand available options.