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When a Georgia business owner dies, business debts do not disappear. Creditors can file claims against the estate, and personal guarantees can turn business debt into a personal liability that reduces what your family inherits. This article explains exactly how Georgia law handles business debt after an owner dies and what you can do now to protect your family.
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Melissa Breyer
Georgia Estate Planning Attorney
Melissa Breyer is a Georgia estate planning attorney who works exclusively on trust-based estate planning and LLC formation. She personally designs every plan at The Hive Law and handles every client consultation herself. Every plan is built from scratch for your specific family, your specific assets, and your specific wishes.
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After my father passed away, my mother had to rely on my father's employer to navigate the estate. It was a disaster. After this experience, I knew I needed a plan. I turned to The Hive Law to set up a trust. I no longer have to worry about my wife and children going through a difficult process if something happens to me. I highly recommend The Hive Law!
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Working with Melissa Breyer to set up our Living Trust was a wonderful experience. She and her entire team were knowledgeable, professional, and made the whole process easy to understand. I highly recommend The Hive Law for all your estate planning needs!
We highly recommend Hive Law. They were extremely helpful and professional in guiding us through the process of creating a Revocable Living Trust. Melissa and Shawn were thorough, answered all our questions, and made a potentially confusing process easy to understand.
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Working with Shawn and Melissa at The Hive Law has been a great experience. They are very knowledgeable and took the time to explain all of our options. They made the process of setting up a trust simple and stress-free. I would highly recommend them to anyone needing estate planning.
The Hive Law Firm, and specifically Melissa, has been wonderful to work with during our estate planning process. She is knowledgeable, patient, and thorough. She answered all of our questions and made the process easy to understand. I highly recommend The Hive Law!
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Hive Law was awesome to work with! Melissa and Shawn explained everything, kept things stress-free, and were always quick to respond to my questions. They made the whole process simple and smooth from start to finish. Highly recommend if you want a team that's knowledgeable but also easy to work with.
I lost my father in February of this year without any estate planning in place. The process of dealing with the probate court has been overwhelming and expensive. After this experience, I contacted The Hive Law to set up a trust so my children never have to go through what I've been through. Melissa and Shawn were compassionate, knowledgeable, and made the entire process simple. I highly recommend The Hive Law!
I used to know the bare minimum about probate and trust. I first encountered Shawn Breyer on Facebook. He was offering a webinar that I watched. That gave me a better understanding of probate versus trust. I was impressed enough to have him and his wife represent me. I had my initial one on one interview with Melissa Breyer, it went smoothly and she made everything clear. We are now proceeding with getting a revocable trust in place.
The Hive Law has been amazing throughout the process of setting up our trust. Every detail is considered and no stone is left unturned. They have been easy and enjoyable to work with. I would absolutely recommend them! Don't let your estate be turned over to Probate!!
Frequently Asked Questions
Not for LLC debt without a personal guarantee. If your LLC carried debt and you never signed a personal guarantee, your family does not owe that debt after you die. The creditor’s claim is against the LLC’s assets only.
If you signed a personal guarantee, the answer changes. That debt becomes a claim against your personal estate. Your executor must pay it before distributing any inheritance. The difference between these two outcomes is entirely determined by whether you signed a guarantee — and most small business owners have signed guarantees on every major financial obligation they carry.
Creditors can file claims against your estate during the Georgia probate process. Under O.C.G.A. § 53-7-17, they have 4 months from the date notice is published to file. Valid claims are paid before heirs receive distributions.
If your business debt is personally guaranteed, those creditors can file estate claims and reduce what your family inherits. Assets held in a revocable living trust pass outside of probate, which changes the timeline and process — but does not eliminate the underlying obligation on a personal guarantee.
A personal guarantee is a clause in a loan, lease, or financing agreement where you agree to pay personally if the business cannot. It removes the LLC’s liability shield for that specific obligation.
Most Georgia small business owners have signed personal guarantees on bank loans, SBA loans, equipment leases, and commercial real estate leases. Check the signature pages of your loan documents. The guarantee clause is usually in the same section where you signed. If your name appears on a signature line labeled “personal guarantor” or “individual guarantor,” you have a personal guarantee on that obligation.
SBA loans almost always include personal guarantees. When you die, the outstanding loan balance is a claim against your estate. Your executor must address the SBA loan during probate, and the loan does not simply go away because the business ceases to operate.
SBA loans frequently also include spousal guarantees — your spouse may have signed as a guarantor even if they are not involved in the business. Check your SBA loan documents specifically. If your spouse is a co-guarantor, they remain liable after your death regardless of what your estate can pay.
Under O.C.G.A. § 53-7-17, creditors have 4 months from the date the executor publishes notice to creditors. That notice is published in the official county newspaper. Once the 4-month window closes, claims filed after the deadline are barred.
The executor is required to review each claim and accept or reject it. Accepted claims are paid from estate assets before any heir receives a distribution. This is why business probate takes 18 to 30 months — the executor cannot distribute to heirs until the creditor window closes and valid claims are resolved.
A revocable living trust does not eliminate personal guarantee obligations. If you signed a personal guarantee, that liability follows you into your estate whether or not you have a trust. The trust does not change what you owe — it changes how and when assets pass to your family.
What a trust does accomplish: trust-held assets pass outside of probate. This means they are not part of the public probate estate that creditors file claims against through the probate court process. The timing and process of creditor access to trust assets is different from probate assets — and in some situations, that distinction matters. Talk to an estate planning attorney about your specific guarantee exposure before concluding whether a trust addresses your situation.
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