You’re doing your estate planning and business succession planning. You want to leave the company to your oldest child. However, you rent the building in which that business is located. You want your child to maintain the lease after you pass away, of course, but can you put that in your estate plan? Can you add that lease to your will so that they can take it over?
The Landlord Must Agree
You do not need to add the lease to your will or estate plan. You can discuss it in your business succession plan, and you definitely want to talk to your child about it when discussing assets and liabilities. They must understand that they don’t own the building and will need to stay current on the lease.
However, to have someone else take over that commercial lease for you, you need permission from your landlord. You cannot put into your estate plan that your child gets to keep renting the space and then expect your landlord to be forced to go along with it. That’s up to them.
Of course, if your company is doing well and you’re leaving everything else — intellectual property, physical assets, etc. — to your child, the landlord probably wants the company to stay in that space. Talk to them about the transfer of ownership and how best to move the lease into your child’s name. You may even be able to sign the next lease extension jointly, so that your child becomes the sole tenant if the unexpected happens. Just be sure you know exactly what steps to take in advance.