When a sole proprietor dies, the business is almost certain to die with the owner unless there is someone in the family who can step in and keep it running. The reason is that the creditors of the
business line up right away to collect their money. The beneficiaries are put under tremendous pressure to settle all accounts payable immediately.
The problem this creates is that the business then must be sold, and quickly. Whenever it is necessary to sell quickly, the potential buyer is in a strong bargaining position, and the sellers
can see their asset greatly diminish. In most cases, the buyer won’t offer nearly what the business is worth, and the shrinkage could be as high as 50 percent.