Deceased sole trader lease debts

madhouse

I wonder if anyone may be able to advise me on this issue. My husband died at the end of last year. He was a sole trader and leased a commercial property in his name only. I am the executor of the will. When he died the business was passed to a colleague of his (the assets were worth very little as it had been run down due to illness). The landlord was notified and they were happy for the colleague to take over. I have been helping him with admin since he took over to get him started. At the start of this year he stopped putting the takings into the bank and I have been unable to pay any bills on his behalf. I have removed my name from the utilities but the landlord has suggested that it is my responsibility to pay the outstanding rent as the business hasn't yet been put into the colleagues name. I have only ever had my name on the business as admin and have never signed any documents including the lease. My question is are they trying it on or might they have a claim against me? Thank you.

bengalknights

If the lease is not in your name then its not your responsibility.

Any outstanding debts should be chased with the estate.

madhouse

Thank you for your reply. I suspected as such, but as they have not moved forward on anything and my husband died insolvent I was getting concerned. Especially after speaking to them.

honeypop

A sole trader business can't be passed on to anyone else, as it effectively comes to an end when the proprietor dies. Any assets will form part of the estate, however all debts (such as the lease) also pass to the estate. So if nothing has been officially transferred to this colleague, then the estate is liable for the lease and that needs dealing with accordingly by you as executor (even though you are not named on the lease).

Was the business passed on to this colleague via a will? If so, then I should think the lease would have been taken into account somewhere in the details. If it was simply decided he would carry the business on, then that's different, as there is no 'business' legally any more unless he has paid something for the basic assets and goodwill etc.

I believe that if he's not actually had anything officially signed over to him, then the income from the business doesn't belong to him.

Eg if I died, my sole trader business would cease to exist, and any income still owing would go into my estate.

madhouse

Thank you. I only realised this yesterday. My fault entirely as it has been a very difficult time. The business had very little assets as it had run down due to my late husbands illness. I am sending a recorded letter today to the landlord officially informing them that I do wish to continue the lease as executor and giving them permission to pass the lease on. The business has been closed with the inland revenue it's the landlord who has been dragging his heels. My husband died insolvent so I just want it all wound up now. Thank you very much for your advice.

lincroft1710

If you decide to take over the lease, you will be responsible for all debts incurred with being the leaseholder, which could be a lot more than just rent. The landlord will have no incentive to re-assign the lease as you have accepted responsibility for it.

madhouse

Thank you. I have spoken to the landlord today and they are going to claim any due money from the colleague using the premises as they are aware my husband died insolvent. I just have to confirm I am happy for the lease to be reassigned. Be nice to get it sorted.

GDB2222

madhouse wrote: »

Thank you. I have spoken to the landlord today and they are going to claim any due money from the colleague using the premises as they are aware my husband died insolvent. I just have to confirm I am happy for the lease to be reassigned. Be nice to get it sorted.

Umm, your late husband died with an insolvent estate. So, who is the executor, and what have they done about the insolvency?