What Happens If the Decedent Had Business Partners?
When a decedent was a business partner, the partner(s) and the personal representative of the decedent are faced with the difficulty of how to close out the existing partnership and liquidate the decedent’s interest in the business partnership.
Both the business partner(s) and the personal representative acquire some rights and responsibilities under these circumstances:
The personal representative may demand an inventory of the partnership assets, and the business partner(s) must provide that inventory within three months. RCW 11.64.002.
The business partners maintain control and possession of the partnership assets and conduct its business, but they must account to the personal representative regularly and pay to the personal representative those portions of the profits owed to the decedent. RCW 11.64.008.
If the court deems it prudent (which usually means the partners are managing the partnership assets badly), the court may require the surviving partners to give security (put up a bond or cash equivalent) pending payment to the estate of the value of decedent’s interest in the partnership assets. RCW 11.64.016.
If the partners fail to provide an inventory, account to the personal representative, permit an appraisal of partnership assets, or furnish bond pursuant to the statute, the personal representative may ask the court to cite the surviving partners to show cause (that is, order them to appear in court and explain their actions) why they have failed to perform. If, after being ordered to perform these statutory acts, the surviving partners still fail to perform, they may be found in contempt of court. If an ordered bond has not been provided, the court may appoint a receiver for the partnership estate, and require the costs of the receiver to be paid from the partnership assets or the estate assets or by the surviving partners personally or partly by each of the parties. RCW 11.64.022.
The surviving partners may ask the court for permission to purchase the deceased partner’s interests in the partnership assets. The court will determine, in a hearing, the value of the assets and debts of the partnership, and set the terms of sale. If a surviving partner is also the decedent’s personal representative, he may nevertheless ask the court for permission to purchase the decedent’s partnership interests. RCW 11.64.030.
A personal representative may, with court approval, enter a contract with the surviving partners to continue the ongoing business of the partnership. The court may revoke any such agreement at any time, at the request of any person interested in the matter. RCW 11.64.040.