This post uses hypothetical scenarios for illustrative purposes only. It does not describe any actual client, transaction, or representation, and is not legal advice.
Here is a deal pattern that surfaces more often than anyone plans for: a Florida business owner dies — mid-negotiation, mid-LOI, or simply mid-career — and within months the company is on the market. Sometimes the family can’t run it. Sometimes the will directs a sale. Sometimes a buyer who circled for years sees the moment. Either way, the counterparty across the table is no longer a founder; it’s a personal representative operating under Florida’s Probate Code, and the deal now runs on Chapter 733 as much as on the purchase agreement. Buyers who treat an estate sale like an ordinary founder sale miss both the traps and the leverage.
Start with whether the personal representative can sign at all.
Florida gives personal representatives a long menu of powers exercisable without court order. Under section 733.612, acting reasonably for the benefit of interested persons, a PR may dispose of assets other than real property at public or private sale (subsection (5)), sell any personal property of the estate for cash or credit (subsection (21)), perform or compromise the decedent’s contracts (subsection (2)), consent to the merger, dissolution, or reorganization of a corporation or other business enterprise (subsection (17)), and execute whatever instruments the exercise of those powers requires (subsection (27)). Because corporate stock and LLC membership interests are personal property, an equity sale of the decedent’s company generally sits comfortably inside the PR’s no-court-order authority.
But the statute opens with the qualifier that decides real deals: these powers exist “[e]xcept as otherwise provided by the will or court order.” Read the will. A will that requires the business be offered to a child first, or held in trust, or sold only with the consent of named beneficiaries, overrides the statutory menu. Buyer’s counsel should ask for letters of administration, confirm they’re unrestricted, and check the will’s dispositive and administrative provisions before spending diligence money. Two adjacent rules matter too. If the decedent ran the business as an unincorporated venture — a sole proprietorship, common in trades — subsection (22) lets the PR continue it in the same form for only four months from appointment, with longer periods requiring court approval, which puts a statutory clock on the sale process itself. And if the decedent had already signed a letter of intent or purchase agreement, subsection (2) empowers the PR to perform or compromise it — the deal your counterparty signed before dying is still very much alive. On the sell side, a decedent who signed a binding LOI has bound the estate; that’s one more reason to be careful about what an LOI actually promises before anyone’s health is assumed.
Real property runs on different rails than the operating company.
Many lower-middle-market deals bundle an operating company with the land it sits on. The equity is personalty; the land is not — and section 733.613 governs. If the will confers a specific power to sell real property, or even a general power to sell any asset of the estate, the PR may sell without court authorization, and the statute adds a sentence buyers should frame: under section 733.613(3), a purchaser in a sale under a specific power, or under a court order authorizing or confirming the sale, takes title free of claims of estate creditors and beneficiary entitlements, existing recorded liens excepted. If instead the estate is intestate, or the will lacks a workable power of sale, the PR may still contract to sell — but no title passes until the court authorizes or confirms the sale. That court order is not a formality to schedule casually; it’s a closing condition with notice dynamics, and the purchase agreement should treat it as one, with an outside date and clarity about who bears the delay risk. Title underwriters in Florida know these rules cold and will drive the requirements list; get them into the file early.
One more authority wrinkle deserves respect: self-dealing. Under section 733.610, a sale or encumbrance to the personal representative or the PR’s spouse, agent, or attorney — or any transaction shadowed by a conflict of interest — is voidable by interested persons unless the will or a contract of the decedent expressly authorized it or the court approves it after notice. That pattern is not exotic. The longtime general manager who is also the decedent’s child and now the PR, buying the company from the estate, is a management buyout wrapped in a statutory conflict. The clean path is court approval with notice to everyone with standing to complain later. Skipping it leaves the buyer owning a voidable deal.
The creditor clock changes how you paper indemnities.
Florida probate runs a compressed statute of limitations regime that deal lawyers can actually use. Claims against the decedent must be presented within three months after first publication of the notice to creditors — thirty days after service, for creditors who must be individually served — under section 733.702, and section 733.710 drops an absolute two-year bar after death regardless of notice, with narrow exceptions for timely-filed claims and recorded liens. For a buyer, that timetable cuts both ways. Early in administration, the universe of claims against the estate is genuinely unknown; late in administration, it is statutorily frozen in a way no ordinary founder sale can match. Timing the closing against the claims window — or at least pricing where the process stands — is real leverage.
The structural problem is what happens after closing. An estate is a dissolving counterparty: it will pay claims, distribute to beneficiaries, and close. A seller indemnity from an entity designed to disappear is worth what’s left when you make the claim. Buyers respond the usual ways — holdbacks and escrows that survive the estate’s closing, distribution agreements with beneficiary joinder so the recipients of the proceeds stand behind post-closing obligations, or R&W insurance in place of a seller indemnity that was never going to be collectible. Sellers’ counsel, for their part, should resist survival periods that outrun the estate’s practical life without a funding mechanism, because a PR has fiduciary reasons not to hold an estate open as an indemnity reserve.
The tax posture is unusually seller-friendly — and the buy-sell should have handled this.
Two tax facts shape estate-side deal economics. First, under IRC § 1014, the basis of the decedent’s equity steps up to fair market value at death. An estate selling shortly after death often recognizes little or no gain on the equity — which changes the negotiation over purchase price allocation, earnout appetite, and installment structures, and can make the estate more indifferent between structures than a living founder with a seven-figure built-in gain would ever be. Second, for S corporations, an estate is a permitted shareholder under IRC § 1361, so death alone doesn’t blow the S election during administration — though where shares pass into trusts, the QSST and ESBT election deadlines become the live issue, a set of traps we walked through in our post on trust shareholders and S-election diligence.
Step back, though, and the larger lesson is that many estate sales are what happens when succession documents failed. A funded buy-sell agreement would have fixed price, buyer, and mechanics the day before death — and the redemption-versus-cross-purchase structure now carries the estate-tax lesson of Connelly v. United States, which we covered in our post on buy-sell agreements and life insurance. Owners who hold equity in a revocable trust avoid this entire probate apparatus, which is one reason buyers increasingly see a trustee rather than a PR across the table. And married Florida owners holding shares as tenants by the entireties add a spousal dimension at death and at closing that we’ve addressed in our post on entireties stock and spousal joinder. If you’re a buyer, none of this planning is your problem — until it’s absent, at which point Chapter 733 is your problem.
The practical checklist is short: read the letters and the will before the LOI; classify each asset as personalty or realty and map the authority for each; put court orders on the critical path where the statute rewards them; assume the seller disappears and secure post-closing recourse accordingly; and let the step-up do quiet work in the price negotiation. Estates sell companies every week in Florida. The buyers who do well are the ones who treat the Probate Code as deal architecture rather than an afterthought.
If you are buying a business from an estate, or serving as a personal representative who needs to sell one, feel free to reach out to our firm manager, Magda, at Magda@montague.law, or fill out our contact form. Mention you read this post.
