{"id":255930,"date":"2026-08-12T11:34:45","date_gmt":"2026-08-12T09:34:45","guid":{"rendered":"https:\/\/highgate.sk\/the-death-of-an-entrepreneur-what-happens-to-the-company-and-its-assets-and-how-to-protect-both-your-family-and-your-business\/"},"modified":"2026-08-19T13:08:33","modified_gmt":"2026-08-19T11:08:33","slug":"the-death-of-an-entrepreneur-what-happens-to-the-company-and-its-assets-and-how-to-protect-both-your-family-and-your-business","status":"publish","type":"post","link":"https:\/\/highgate.sk\/en\/the-death-of-an-entrepreneur-what-happens-to-the-company-and-its-assets-and-how-to-protect-both-your-family-and-your-business\/","title":{"rendered":"The Death of an Entrepreneur: What Happens to the Company and Its Assets, and How to Protect Both Your Family and Your Business"},"content":{"rendered":"\n

In previous articles, we discussed how marriage and the BSM regime affect business<\/a>, how to protect a company and investments during a divorce<\/a>, and how a business interest is settled after a divorce<\/a>. However, divorce is not the only situation that can jeopardize assets built up over many years. <\/p>\n\n

The second\u2014and, paradoxically, much less discussed\u2014is the death of an entrepreneur.<\/strong><\/p>\n\n

While most business owners acknowledge the possibility of divorce\u2014at least in theory\u2014almost none of them factor their own mortality into their plans. We see the result in practice all the time: a company that loses its sole executive and partner overnight, frozen bank accounts, employees without pay, business partners without a point of contact\u2014and a family that, in addition to their grief, must deal with months-long probate proceedings over assets they often didn\u2019t even know existed. <\/p>\n\n

In this article, we\u2019ll explain what happens to assets held in joint marital property (BSM) after an entrepreneur\u2019s death, what happens to a business interest in a limited liability company (s.r.o.), why probate proceedings are a critical period for an operating business, and, most importantly, what steps can be taken during one\u2019s lifetime to ensure that both the family and the business survive even the worst-case scenario.<\/p>\n\n

Death dissolves both the marriage and the joint property of spouses<\/strong><\/h2>\n\n

Joint ownership of spouses (BSM) terminates upon the dissolution of the marriage\u2014and a marriage is dissolved not only by divorce but also by the death of one of the spouses. Unlike in the case of divorce, however, BSM is not settled after death by agreement between the former spouses or in separate court proceedings, but directly as part of the probate proceedings. <\/p>\n\n

The settlement is carried out by a notary acting as a judicial commissioner pursuant to Section 195 of the Civil Non-Contentious Procedure Code. In doing so, the notary follows the same principles as in a divorce (Section 150 of the Civil Code)\u2014that is, proceeding on the basis that the shares of both spouses are equal. <\/p>\n\n

Simply put, this means: half of the property belonging to the joint marital property (BSM) goes to the surviving spouse as part of the settlement of the joint marital property\u2014this portion is not inherited at all, because it already belonged to the surviving spouse during the marriage. The other half becomes part of the estate and is divided among the heirs\u2014including the surviving spouse, who is now considered one of the heirs. <\/p>\n\n

Real-world example: <\/em><\/strong>During their marriage, the couple acquired a house worth 400,000 euros and have 100,000 euros in joint accounts. Upon the husband\u2019s death, the wife is entitled to half (250,000 euros) of the settlement of the joint marital property. The remaining 250,000 euros constitutes an inheritance, which is divided equally among the wife and their two children\u2014each inherits assets worth approximately 83,333 euros. The wife will thus receive a total of two-thirds of the assets, not \u201ceverything,\u201d as many mistakenly believe. <\/em><\/p>\n\n

Who inherits if a business owner did not leave a will?<\/strong><\/h2>\n\n

If the decedent did not write a will, inheritance is governed by law. In the first class of heirs, the testator\u2019s children and spouse inherit, each receiving an equal share. Thus, the spouse never inherits alone alongside the children\u2014and certainly does not \u201cautomatically inherit the entire company.\u201d <\/p>\n\n

In addition, complications arise that families are often unprepared for. If there are minor children among the heirs, every action they take in the probate proceedings must be approved by the court, and they are represented by a guardian ad litem\u2014an agreement among the heirs that would otherwise take weeks can thus drag on for months. At the same time, the heirs are liable for the decedent\u2019s debts up to the value of the inherited estate\u2014so if the business is in debt, the family may inherit not only assets but also liabilities. Finally, if the entrepreneur had children from a previous relationship, they inherit an equal share alongside the children from the current marriage\u2014in the case of a business interest, this means that people who have never communicated with one another may become partners in the \u201cfamily\u201d business. <\/p>\n\n

What happens to a business interest in a limited liability company (s.r.o.)?<\/strong><\/h2>\n\n

A business interest is inheritable\u2014this is expressly stated in Section 116 of the Commercial Code. However, how the inheritance takes place depends fundamentally on the terms of the articles of association. <\/p>\n\n

If the articles of association do not preclude inheritance, <\/strong>the business <\/strong>interest passes to the heirs. If there are multiple heirs, they become joint owners of a single interest and exercise their rights through a joint representative. Imagine a general meeting at which a single share is represented by a widow and three children with differing visions for the company\u2019s future\u2014for the partners who built the company alongside the decedent, this is a nightmare. <\/p>\n\n

If the articles of association exclude inheritance ( <\/strong>which is possible only in a company with multiple shareholders, not in a single-member limited liability company), the share does not pass to the heirs. The heirs are entitled to a settlement share\u2014a monetary compensation calculated based on the company\u2019s equity. The company thus remains in the hands of the remaining partners, but they must be prepared to pay out the heirs. <\/p>\n\n

An heir who does not wish to become a partner <\/strong>may seek to have <\/strong>his or her participation in the company dissolved by a court if it cannot reasonably be expected that he or she remain in the company\u2014again, with the right to a settlement share. However, this option does not apply if the heir is the sole partner. <\/p>\n\n

And be aware of the connection to the joint marital property (BSM): if a business interest was acquired during the marriage using joint funds, its value is part of the BSM\u2014as we discussed in detail in the article on the settlement of business interests after divorce<\/a>. Therefore, before the estate is distributed, the joint property of spouses (BSM) is settled first, and only then is it determined what portion of the business interest\u2019s value actually constitutes part of the estate. <\/p>\n\n

A Company Without a Managing Director: The Most Critical Period<\/strong><\/h2>\n\n

Legal issues surrounding inheritance are one thing. The practical realities are another\u2014and those are often worse. <\/p>\n\n

If the deceased was the company\u2019s sole managing director, the company suddenly loses the person authorized to act on its behalf. No one can sign contracts, manage bank accounts, pay invoices or wages, or communicate with the tax authority. A new managing director is appointed by the general meeting\u2014that is, the shareholders. If the deceased was also the sole shareholder, there is no one to attend the general meeting until the probate proceedings determine who is the heir to the share. <\/p>\n\n

Inheritance proceedings typically take six months to a year, and can take significantly longer in cases involving disputes among heirs or minor children. Few companies can survive a year without the ability to take legal action\u2014employees leave, clients find other suppliers, and the value of the share being inherited erodes in the meantime. <\/p>\n\n

Real-world example: <\/em><\/strong>The businessman was both the sole shareholder and managing director of a construction company (s.r.o.) with fifteen employees. After his sudden death, there was no one to sign off on payroll or take over ongoing contracts. By the time the probate proceedings ended eight months later, the company had lost most of its employees as well as key contracts. In the end, the heirs inherited a stake in a company whose value had meanwhile fallen to a fraction of its original amount\u2014all in a situation that could have been prevented with a single signature: the appointment of a second managing director. <\/em><\/p>\n\n

What about self-employed people?<\/strong><\/h2>\n\n

The situation is different for self-employed individuals\u2014a business license is tied to the entrepreneur personally and, in principle, expires upon their death. However, the Trade Licensing Act allows the surviving spouse or heirs to continue the business until the inheritance proceedings are concluded. The business assets of the self-employed individual (equipment, inventory, accounts receivable) are part of the estate\u2014and if they were acquired during the marriage, they are first settled as part of the joint marital property, as described above. <\/p>\n\n

How to Prepare: Tools That Work<\/strong><\/h2>\n\n

Some good news to wrap things up: virtually all of the scenarios described can be prevented. The tools exist, they are available, and most of them can be implemented within a few weeks. <\/p>\n\n

Will and Deed of Disinheritance. <\/strong>In a will, you can specify who will inherit a business interest and who will inherit other assets\u2014for example, so that the business goes to a child who works there, while the other heirs are compensated with other assets. There are restrictions regarding mandatory heirs: minor descendants must receive at least their statutory share of the inheritance, and adult descendants must receive at least half of that share. A spouse is not considered a mandatory heir. <\/p>\n\n

Amendment to the Articles of Association. <\/strong>The partners may specify in advance whether a business share will be inherited or whether they will exclude inheritance and pay out the heirs. Similarly, the method for determining the settlement share can be adjusted so that its calculation comes as no surprise to either the company or the family. <\/p>\n\n

Second managing director or authorized signatory. <\/strong>The most affordable insurance policy of all. If a company has multiple managing directors or authorized signatories, the death of one of them will not paralyze its operations, and the company will be able to continue operating without interruption throughout the probate proceedings. <\/p>\n\n

Arranging a BSM while still alive. <\/strong>An agreement to limit the scope of joint marital property in the form of a notarial deed can clarify in advance what constitutes joint marital property and what does not\u2014thereby significantly simplifying and speeding up the probate process. We addressed this topic in an article on protecting assets from the risks associated with joint marital property<\/a>. <\/p>\n\n

Life Insurance and Liquidity. <\/strong>Heirs often inherit valuable but illiquid assets\u2014such as a stake in a company or real estate. Insurance proceeds are not part of the estate if a beneficiary is designated in the policy, and they can provide the family with immediate liquidity to bridge the period of probate proceedings. <\/p>\n\n

Holding and Ownership Structure. <\/strong>For larger estates, it makes sense to separate the business, real estate, and investments into a structure that is prepared in advance for generational succession and does not place the entire risk on a single probate proceeding.<\/p>\n\n

No one plans to die. But you can prepare for it. <\/strong><\/h2>\n\n

The death of a business owner is a situation in which family law, inheritance law, and corporate law all converge at a single moment\u2014and every mistake or delay costs the family money, time, and stress at a time when they have entirely different matters to deal with.<\/p>\n\n

The difference between a family that faces an existential crisis after the death of an entrepreneur and a family that seamlessly takes over a functioning business does not come down to luck. It lies in whether the entrepreneur took a few weeks to organize his or her assets while still alive. <\/p>\n\n

That is exactly what Estate Vault<\/strong> is for\u2014a comprehensive solution for estate planning, succession, and family protection that combines legal tools ranging from wills to amendments to articles of association to asset structures into a single, functional whole.<\/p>\n\n

If you\u2019d like to know what the probate process would look like in your specific situation\u2014and what aspects can be arranged differently\u2014 please schedule a consultation<\/a>. We\u2019d be happy to help you develop a solution tailored to your business and family. <\/p>\n\n

Related articles:<\/strong><\/h2>\n\n

\u2022 Marriage and Business: How to Protect Your Assets from the Risks of Joint Property (BSM<\/a>)<\/p>\n\n

\u2022 Divorce and Business: How to Protect Your Company and Investments from Asset Loss<\/a><\/p>\n\n

\u2022 Settlement of a business interest after divorce<\/a><\/p>\n\n

\u2022 Settlement of joint marital property by a court at the request of one of the spouses<\/a><\/p>\n\n

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If you are interested in this topic, please do not hesitate to contact us:<\/p>\n\n