Spouse liabilities in sole director dies

thrifty_totty

If a sole director passes away for whatever reason, does his spouse (also next of kin) become liable for the companies debts, returning rented units back to their original state etc.

Any advice greatly appreciated or what field a solicitor needs to specialise in to advise on this situation.

Many Thanks

MyRealNameToo

thrifty_totty said:

If a sole director passes away for whatever reason, does his spouse (also next of kin) become liable for the companies debts, returning rented units back to their original state etc.

Any advice greatly appreciated or what field a solicitor needs to specialise in to advise on this situation.

Were there any personal guarantees from the director? If so then the estate will owe whatever the debts are before it's distributed. 

Who's the shareholders of the company? Just the deceased or the spouse too? 

The executors of the will will typically have the ability to appoint a new director to the company and will do so either to keep it running (if viable) or wind it down eg if the deceased was the sole fee earner in the business)

SadCodeMan

If this is a limited company then I think the limit of any liabilities would be the assets of the company.
(Assuming no dishonest behavious deliberately to move assets away from the company that should not have been)

However, it is not unusual for directors to (or maybe other related parties) to sign separate guarantees for loans/leases etc..

If that was the case for the spouse, I would expect them to have signed something saying they accepted this so would know.

If there was one and it was the director who had signed it then their estate might be liable for the loss but only up to the value of their estate. 

I don't think there is any way that the next of kin otherwise would be liable. They might just get less because some debts needed to be settled by the estate.

poseidon1

thrifty_totty said:

If a sole director passes away for whatever reason, does his spouse (also next of kin) become liable for the companies debts, returning rented units back to their original state etc.

Any advice greatly appreciated or what field a solicitor needs to specialise in to advise on this situation.

Many Thanks

Sounds like you need a firm of solicitors large enough to have specialism   not only in probate, but also commercial property leases, and company law and practice.  I would have thought there is a lawyer already in the background who advised on the leases in the first place.

Hopefully there is also a  pre existing accountant who handles the company accounting and tax compliance for the business  and can assist a law firm on your behalf in the process of ascertaining values for business assets and liabilties for probate purposes.

A Chartered surveyor may also be required in ascertaining any dilapidations obligations, where you are seeking to terminate/escape from commercial leases.

If you were never an active part of the business concerned, I sense all of this will be a very steep learning curve for you. A good pro -active and commercially minded accountant would be an asset in this situation to help pull all the threads together, and interface with the lawyers as necessary.