A partnership can be an efficient method of pooling resources to the fiscal benefit of all concerned. However, it brings with it responsibilities and a chance of possible financial burden, especially when one of the partners dies, retires or becomes disabled. For a partner, his share in the business is likely to be his greatest financial backup so he needs to take steps to protect it, not only for the good of his family but also for the benefit of the other partners in order to help ensure the succession of the business.

In the event of the demise of a partner, the business assets and the bank accounts will be frozen until a proper succession of the dead partner is established, and the other partners will also lest with no access to the bank account or assets of the company. What happens to the value of the business then? The value of the business diminishes considerably. This causes a huge loss to the existing partners as well as the dead partner’s family. It can cause immediate financial hardship for the remaining partners and maybe even loss of control of the business. In essence, the death of a partner can potentially jeopardize the future of your business and can have major implications for the remaining partners.