Would I have any responsibility to my dad's employees?

[Zigner]

I'm his only family. What sort of trouble would I have to deal with? Right now he refuses to talk about it because he is very depressed.

Somebody will need to deal with his estate.
Of course, you can't be required to do it, legally speaking, but it does need to be done and I suspect it will fall on you.

 

[notmyemployees]

Somebody will need to deal with his estate.
Of course, you can't be required to do it, legally speaking, but it does need to be done and I suspect it will fall on you.

Do I need to do anything to get someone else to do it or can I just ignore it if anything about it comes up?

 

[quincy]

I'm his only family. What sort of trouble would I have to deal with? Right now he refuses to talk about it because he is very depressed.

Do I need to do anything to get someone else to do it or can I just ignore it if anything about it comes up?

It is of course best if your father can do some advance planning but, yes, you can ignore it all. The problem with this is that, if your dad has any personal property he values and would like to pass on to you, that option may no longer be available.

That your father is depressed is understandable. That is a normal reaction to the devastating news your dad received. You might want to give him a short time to grieve and then let him know that you want and need his help - and the way he can best help you is to get his last wishes immortalized in writing. Let him know that an estate planner can help eliminate all of the financial worries so you and he can better enjoy your last days together.

 

[notmyemployees]

It is of course best if your father can do some advance planning but, yes, you can ignore it all. The problem with this is that, if your dad has any personal property he values and would like to pass on to you, that option may no longer be available.

That your father is depressed is understandable. That is a normal reaction to the devastating news your dad received. You might want to give him a short time to grieve and then let him know that you want and need his help - and the way he can best help you is to get his last wishes immortalized in writing. Let him know that an estate planner can help eliminate all of the financial worries so you and he can better enjoy your last days together.

He already gave me all the important personal stuff like photos and things like that. He'll be okay financially for the rest of his life. That's not a worry.

 

[quincy]

He already gave me all the important personal stuff like photos and things like that. He'll be okay financially for the rest of his life. That's not a worry.

Here is a checklist you can go over to see if there is anything more your dad should do:

https://www.nia.nih.gov/health/getting-your-affairs-order-checklist-documents-prepare-future

I wish you and your dad the best.

 

[Litigator22]

Nevada

I'm not exactly sure if this was the best section to post this because there are multiple issues.

My dad has his own company. I have worked for him for my whole life and had planned on taking over the business. He just found out he is terminally ill and will likely pass away soon, so I have been going over his business and finances. His company has a lot of debt. So I've been thinking that it will be better for me to start over with a new company in the same field. The thing is his old employees have contracts with severance pay. My dad's company does not have the money to pay for these things, nor does he have any personal money or assets that could pay for this and I don't plan on hiring very many of these people for my new company. Given that I'm going to want to use my dad's last name for the new company (which is also my last name) I'm sort of worried they will try to come after me for their severance.

Let's face it. What you are seeking is to be able to enjoy the fruits of the business and avoid compensating those that labored in producing them. In plain words, step into dad's shoes, assume the assets of the business - good will, customer base, business supplies, fixtures, and whatever, but shamelessly none of its liabilities.

Well, there are means by which you can accomplish your goal (as you lawyer will explain). However, after dad has passed and you elect to open the same doors under the same surname, solicit the same customer base, carrying on business much as in the past - mostly likely you can expect to spend a good deal of money and time in a civil courtroom sitting with your $350 plus per hour lawyers defending against his old employees attempting to assert their contractual rights. For you a no-win situation.

 

[quincy]

... assume the assets of the business - good will, customer base, business supplies, fixtures, and whatever, but shamelessly none of its liabilities. ...

Forget the son/dad relationship. Why should an employee of a company take on the liabilities of the company/employer?

If the company is dissolved, its assets will be sold to satisfy the debts.

 

[notmyemployees]

Let's face it. What you are seeking is to be able to enjoy the fruits of the business and avoid compensating those that labored in producing them. In plain words, step into dad's shoes, assume the assets of the business - good will, customer base, business supplies, fixtures, and whatever, but shamelessly none of its liabilities.

Well, there are means by which you can accomplish your goal (as you lawyer will explain). However, after dad has passed and you elect to open the same doors under the same surname, solicit the same customer base, carrying on business much as in the past - mostly likely you can expect to spend a good deal of money and time in a civil courtroom sitting with your $350 plus per hour lawyers defending against his old employees attempting to assert their contractual rights. For you a no-win situation.

I'm not going to touch any of the physical assets of my dad's company. It would really only be the customers and goodwill, which I think is fair since I did build up a lot of those relationships on my own in recent years.

 

[Zigner]

I'm not going to touch any of the physical assets of my dad's company. It would really only be the customers and goodwill, which I think is fair since I did build up a lot of those relationships on my own in recent years.

As an employee, you were compensated for that.

 

[zddoodah]

I believe it's an S-Corp.

Better to know than believe, but assuming that's correct...

The thing is his old employees have contracts with severance pay.

Those contracts are between each employee and the corporation, right? I'll assume it is.

Given that I'm going to want to use my dad's last name for the new company (which is also my last name) I'm sort of worried they will try to come after me for their severance.

No one has any obligation to the employees other than the corporation. If, after your father's death, you dissolve or abandon the corporation, then those employees will be SOL. Using your father's name in a new company that you subsequently form isn't relevant, but you could, in theory, face an argument that you or your new company is a successor-in-interest to the current corporation, so you would be well advised to seek advice from an attorney to make sure you're as insulated as possible.

Can I just refuse to inherit from him and avoid this?

Declining an inheritance would probably help negate a successor-in-interest claim.

Would it be a problem if I offered job to some employees at my dad's company?

Probably not.

you need to strongly urge your father to do some estate planning as quickly as possible; otherwise, his family will be left with a HUGE mess.

I'm not sure I agree with that. All we know is that the father owns shares of what may be an insolvent corporation and may be insolvent himself. If the OP doesn't want to inherit the existing corporation (or otherwise take possession of the corporation's physical assets) or any of the father's other assets, I'm not sure a lack of estate planning will matter at all. Intangible things like a customer list and goodwill aren't going to be an issue.

 

[notmyemployees]

As an employee, you were compensated for that.

Not really. I did a lot of networking outside of work hours.

 

[notmyemployees]

[/QUOTE]
Those contracts are between each employee and the corporation, right? I'll assume it is.
[/QUOTE]

Yes, their contracts are with my dad's company.

 

[quincy]

Not really. I did a lot of networking outside of work hours.

You can always consult with a lawyer in your area of Nevada - and that would be a smart thing to do - but children are generally not liable for the debts of their deceased parents UNLESS they co-signed on a loan or have property held jointly.

What will happen if your dad does nothing and you do nothing is that all of your dad’s real property and all of his personal possessions will become part of his estate. With a will, an executor or personal representative will handle the estate. Otherwise an administrator will take on that role. Debts will be paid from the estate assets (cash on hand or through the sale of property).

The S-Corp can be dissolved and assets sold to satisfy debts. The debts could include money still owed to employees.

Your new business should be able to build on the name and goodwill of your dad’s company, absent any facts unknown to us.

 

[adjusterjack]

He doesn't have a will or trust.

Then he will die intestate. If he has no spouse and you have no siblings, you will inherit what is left of his estate after his debts are paid. Since this is a one person S corp, his creditors (employees) may be able to "pierce the corporate veil" and go after his personal assets (home, cars, accounts, etc) to enforce their contracts.

Or not.

The thing is, you may inherit an expensive can of worms if you don't get an attorney's advice.

 

[notmyemployees]

Then he will die intestate. If he has no spouse and you have no siblings, you will inherit what is left of his estate after his debts are paid. Since this is a one person S corp, his creditors (employees) may be able to "pierce the corporate veil" and go after his personal assets (home, cars, accounts, etc) to enforce their contracts.

Or not.

The thing is, you may inherit an expensive can of worms if you don't get an attorney's advice.

I know they could go after his personal assets. He doesn’t have much. So I wasn’t expecting to get anything and I thought I could refuse to inherit.