Chapter 20 - § 20.18 • CONTINUING BUSINESS

• Jurisdiction: Colorado

§ 20.18 • CONTINUING BUSINESS

Engaging in active business activities has always been of concern to fiduciaries. The fiduciary may not be staffed or experienced to run a business. The representative should consider sale of the business or distribution to the decedent's successors (whether intestate or under a will). In the interim, the agent should be carefully selected and the adequacy of insurance checked. The Colorado Fiduciary's Powers Act lists the carrying out of a business among statutory powers, and there may be authorization in the powers clause of the will. The exercise of such authority is, however, subject to the test of prudence. If authority to continue a business is to appear in a will, it must appear in a clear and positive manner. The beneficiaries may estop themselves to hold the representative liable for losses in the continuation of a business if it is done with their consent or approbation. Peppler, 971 P.2d 694.

C.R.S. §§ 15-1-701 and -702 authorize a personal representative, under certain circumstances, to create an entity, such as a family limited partnership or a limited liability company, to own a business that the decedent had operated as a sole proprietorship, and to distribute units in the entity rather than fractional interests in the business property. See § 34.38.

When there is a specific disposition of a business by will, a question of some difficulty arises, unless the will is carefully drawn, as to what is included in the devise, such as stock in trade, inventory, fixtures, and chattels used in the business, book accounts, notes, and...