ECN Forum Forums General Topics of the Trade Business Related Discussion Untimely Demise

Yes, this is an important subject. When I first saw it, I did not notice the date, but I noticed the OP was 'unregistered' and anonymous. I almost removed it, but decided to check with Bill first. Bill is the guy who brought the date to my attention, along with a guess on how an unregistered person could post.

That said, let's see how much action this subject creates!!

Tesla:

Why the $100Mil insurance minimum?? The LLC regs here had nothing to do with the required minimum insurance that ECs must carry. That is a requirement for the EC Business Permit here, enforced by the Board of Electrical Contractors.

The issue is actually pretty simple.

One man show? Sole proprietorship with employees? Same answer: the business dies when the principal dies. Period. ANY permissions or authorities, ALL obligations, end as well. Period.

Some things can be done to smooth over the transition- things like 'durable power of attorney,' but essentially the process is: all assets and liabilities are frozen as the 'estate,' and Probate Court decides what to do.

Now, there are various legal practices that will change the question. Incorporating and trusts are two such methods- the principal may die, but the corporation and trust continues to exist, subject to it's charter.

Kin and staff may mean well, but their hands are tied. They have not the authority to spend a nickel, and no contract exists between them and the customers. It's time to re-do the paperwork.

One of the first things that happens is that someone petitions the court to be appointed as 'administrator', or have their claim as 'executor' of the estate recognized. Only then does that person have any right to notify creditors, sign checks, etc.

Rant on a tangent: This stuff is pretty basic. IMO, it is a scandal that anyone graduates High School without a basic understanding of such matters. The schools have a lot to answer for!

Is it different in every jurisdiction? I think the concept of limited liability companies is fairly universal, but officers might have different liabilities.

FWIW, in Canada, I have personal exposure for corporate taxes and unpaid employees, with or without a corporation. After I die, my remaining assets are also exposed.

To make it worse, my wife is a US citizen, so if she has a financial interest or even signing authority over money, it has to be reported to the US government. That's my rant on a tangent.

What I was getting at was not only the executor need to find things, if the executor is a love one, they are already under great stress so they need something, anything to assist them through the termoil.

I got the $100,000,000 figure from the CSLB -- it was in their quarterly blurb.

The WHOLE point of a LLC is to limit liability -- without going the corporate route.

Our CSLB has been fanatically against any limit to a contractor's liability as a point of principle.

Such a hurdle must mean that no one in California uses a LLC. I suspect that the insurance scheme is designed for big time players ( out of state ) who want to bid on the big government contracts. Those already have very high insurance stipulations built in.

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The real solution is to never die.

Alternately, quit working long before you stressing your body. Out my way, most ECs have been driven out of business before they could die. So they have that going for them.