Working with Estate

From a legal perspective, you will want to be crystal clear that ownership has legally transferred to whoever is purportedly selling you the business. Maybe that's a trust, or an estate, or heirs, but you will want (and presumably any lenders or investors will also want) clarity on the amorphous "chain of title" to the business and do your best to find out if there is anyone who could contest the sale down the road. You'll probably benefit from a lawyer with some knowledge of the probate system in the state where the owner lived and/or the business operated. It's not an insignificant increase in risk, and should be reflected with a discount on the purchase price, IMO. Good luck!

And to the operators out there - do some succession and estate planning!

^Searchfunder member‌ I agree with the comments above. Without the seller and not yet knowing how the long term employee will do running it - you're at a significant information disadvantage. And you're now highly dependent on this single employee who is not the owner. Why does this matter? If the owner was running the business, you'd be paying the person with the knowledge and you could have kept him connected to the business through a seller note, rollover equity, and/or a non-compete backed up by an escrow from the purchase price. Now you are paying the estate that doesn't have the knowledge and then needing the employee who is running it. The employee has a lot of leverage over the estate presently and will have that same leverage over you (but less history with you). I'd be careful. And it may take more time and you need to know who in the estate actually has the right to sell. I've made mistakes in the past thinking that a single person who may have a fancy title can sell a business only to find out later that several people need to agree for the sale to occur and those people have very different objectives. Be careful. If you need help on diligence, message me.