Sole Trader Account after death

wouldyoulikeacupoftea

My father passed away last week. He was a sole trader owning various business assets which were rented to other people and businesses (e.g. renting out office space). Most of his tenants pay rent via direct debit into his Sole Trader account.

We know he will have passed the property on to members of his family. However its going to take many months for the property to be transferred. It going to take us about 10 days even to withdraw an official copy of the will from safekeeping, then a month or two to sort out inheritance tax. So the executors (also members of his family) will not get probate for some time.

I read that Sole Trader businesses essentially cease to exist when the Sole Trader dies. Once we get the official death certificate we will be notifying his bank, and then presumably they will stop any further rent payments from going into his account.

I havent yet read the contracts that the tenants had with my Dad, perhaps the contracts have a clause that will make things clearer.

But in the meantime my question is:

What happens to the tenants between now and redistribution of the estate? Who do they pay rent to? Are they still officially tenants? If so, who are they tenants of?

jonesMUFCforever

The person/s dealing with the estate should ask any tenants to pay rent to the executrix/or administrators of the deceased.
You will have to open a personal representatives account to bank these funds.
When Probate has been granted this account can be changed to an Executors account and the monies paid out as per the will.

My condolences.

cottager

Every sympathy to you and your family.

I read that Sole Trader businesses essentially cease to exist when the Sole Trader dies. Once we get the official death certificate we will be notifying his bank, and then presumably they will stop any further rent payments from going into his account.

OH is a sole trader and in the same circumstances I imagine this would be the case, as he and the business are regarded as the same entity. And almost certainly the a/c will be frozen as soon as you notify the bank. It wasn't a business a/c but when I notified my mum's bank of her death, it was instant, there and then.

jonesMUFC has already pointed the way with your particular rental questions at the moment, but you may also find some people with experience of this situation over on the Small Biz board:
http://forums.moneysavingexpert.com/forumdisplay.php?f=27
If not for this then perhaps for dealing with any other issues and implications as they arise in connection with your father's business.

wouldyoulikeacupoftea

Thank you both that was very helpful.