Running a business means planning for everything… like launches, slow seasons, growth goals, and the unexpected. But there’s one “what if” most entrepreneurs avoid thinking about altogether: what happens if you’re not here to run your business anymore?

Planning for that possibility isn’t about being morbid; it’s about responsibility. It’s about being kind, prepared, and professional. Because if something happens to you, your family, clients, and team will be the ones left picking up the pieces.

So, let’s ask the question head on: What happens to my business when I die? 

The answer involves understanding who inherits your business, how your clients and current contracts will be managed, and what steps you can take today to protect both your loved ones and your legacy.

This blog will walk you through what really happens to your business after you’re gone. Yes, it’s uncomfortable, but necessary things often are. A little preparation today protects your legacy, your clients, and the business that you worked hard to build. And once you make a plan, it's incredibly freeing knowing that your business and family will be okay! 

Know the Legal Basics: Will vs. Trust

A will says who gets what after you die — but it has to go through probate. The pros about wills is that they are easy and cheap to set up. The con of a will is that the court still will need to get involved and 

Creating a will and designating a personal representative is essential in securing your business and the future of your family. A will makes all the difference when it comes to who inherits your estate and who serves as its representative. Drafting a will can help avoid potential conflict between family members and stress down the line. Proper preparation is key!

A trust on the other hand, activates right away and lets assets transfer privately, saving time and stress.

A trust is a legal arrangement that lets you place your assets—like money, property, or even your business—into the care of someone you choose (the trustee) to manage for the benefit of others (your beneficiaries). Unlike a will, a trust takes effect as soon as it’s created and can continue after you pass away. One of its biggest perks is that it helps your loved ones skip the lengthy, public probate process, keeping things private and efficient. It also allows you to set clear rules for how and when assets are used—making it a powerful tool for protecting your family and your business long-term.

Both are valuable, but neither should sit in a drawer collecting dust. Review them regularly, especially if you own a business.

Protect Your Family (and Clients) Financially

Insurance is another layer of protection that works hand-in-hand with your will or trust, and for many business owners, it’s one of the smartest decisions you can make for your family today. While a will outlines who gets what, insurance ensures that your loved ones and business are financially secure the moment something happens. Life insurance can replace lost income or cover debts, key person insurance keeps your business running if a crucial owner or employee passes, and disability insurance protects against unexpected inability to work. In short, insurance isn’t just a safety net—it’s a proactive way to give your family stability, peace of mind, and the resources to move forward, no matter what.

The right insurance policies can save everyone enormous stress:

• Life insurance replaces lost income.
  

• Key person insurance keeps your business afloat if you or a key business partner or employee dies.
  

• Disability insurance helps if you’re temporarily unable to work.

Plan for Your Business, Not Just Your Personal Estate

Here’s the secret no one tells entrepreneurs: your personal will doesn’t cover your business.

Whether or not you have a will, a few things will happen to your business depending on your business designation. As a sole proprietor, upon your death, the state of your business and any associated debts or assets will become the responsibility of your personal representative to handle and distribute. Essentially, your business and your personal assets are one and the same. Your personal representative and heirs will then have the option to either cease business operations, sell the business, or create their own business based on the existing business platform.

For LLCs, an operating agreement outlining the succession of ownership is essential for when the business owner passes away. This ensures that their heirs (and potential co-members) are clearly informed about what will become of the company and its assets. In the event of a multi-member LLC, an operating agreement should explain what will occur to that individual's portion of the business, such as either enabling beneficiaries to step into their role or allowing existing members to purchase the share of the business from heirs. While certain distributions may be made depending on the case, most scenarios enable one or more persons to keep operating with the same LLC status. Essentially, your LLC’s operating agreement should clearly state: Who takes over or winds down your business, what happens to your share or assets, and how unfinished client work or refunds are handled.

Appoint Your “Wind-Up Person”

When you die, your business doesn't just die with you! You need someone to help you wind up your client obligations, notify clients of your death and close all of your accounts. Your wind-up person is the trusted individual who steps in to manage your business if something happens to you. Think of them as your “business guardian angel” — the person who knows your operations, can make decisions on your behalf, and ensures your clients, employees, and assets are taken care of exactly the way you would want. Choosing the right person ahead of time removes uncertainty, prevents costly mistakes, and gives your family and team confidence that your legacy will be handled with care and professionalism. This is the trusted person who can step in to handle your business if you die or can’t work.

Choose someone who’s:

• Organized

• Trustworthy
  

• Familiar with your business
  

• Able to communicate with clients kindly and clearly
  
  

Talk to them now. Get their consent, explain the role, and put it in writing.

Prepare a Business Wind-Up Plan

A Business Wind-Up Plan is your roadmap for what happens to your company if you’re suddenly unable to run it. It ensures that clients are taken care of, finances are handled, and operations are closed or transitioned smoothly—without leaving your family or team scrambling to figure things out. By laying out clear steps and instructions ahead of time, you protect your legacy, maintain your professional reputation, and give your loved ones peace of mind during an already difficult time. If you disappeared tomorrow, Your Wind-Up Person would know what to do about:

• Booked clients

• Outstanding invoices
  

• Refunds or files to deliver

• How you would like your death announced. 

Create Your “In Case of Death” File

One of the many ways you can help your loved ones prepare for the worst is by preparing a binder or designated spot for confidential information and passwords for your family and business Wind-Up Person. Also called a Death Folder, Life File, or Peace of Mind Packet — it’s the single smartest thing you can do for your loved ones. This is an important step in ensuring your loved ones have access to the necessary information for your business in case of an emergency or your incapacity. 

Your In Case of Death File can be either Physical or digital, just make sure someone knows where your In case of death file is and how to access it.

Inside your In Case of Death File, you should include:

• Your will, trust, and insurance info
  

• Business documents (EIN, contracts, login credentials)
  

• Personal and Business Bank and tax details
  

• Client lists and open projects
  

• Instructions for winding up or transferring the business

• And so much more! 

We know all of this planning can feel overwhelming, which is why we’ve made it simple for you. Our In Case of Death File gives you a ready-made, organized system to keep all your essential documents, business information, and instructions in one place. It’s designed to take the guesswork out of estate and business planning, so your loved ones and team can act quickly and confidently if something happens. By providing this file just for you, we’ve made it easier than ever to protect your family, your clients, and the business you’ve worked so hard to build.

Running a business isn’t just about income or brand—it’s about legacy. And while the idea of “what happens when I die?” might feel kind of icky or uncomfortable, letting that question sit unanswered is an ethical blind spot. By proactively choosing your heirs, structuring operating agreements, documenting contracts, and securing access to your digital and financial life, you’re not just protecting your business—you’re honoring your team, your clients, your family, and yourself.

Don’t wait for “someday” to get started on your succession planning. 
You can watch the free training, “What Happens to Your Business If You Die? (The Succession Plan Every Small Business Owner Needs)”, and learn the step-by-step process for creating a seamless business handoff!

Start Watching →