The Short Answer

In Pennsylvania, transferring a decedent’s business interests usually requires the personal representative (executor/administrator) to take control of the interest as an estate asset, obtain a defensible date-of-death valuation, and then distribute or sell the interest under the estate’s authority and any governing documents (operating agreement, bylaws, partnership agreement). If the business must keep operating during administration, the Orphans’ Court can authorize the estate to continue the business and set rules for liability and management.

What Pennsylvania Law Says

As a starting point, the personal representative generally has the right to take possession of and administer the decedent’s property during estate administration, which commonly includes ownership interests in closely held companies (LLCs, corporations, partnerships). That authority is important because business interests often cannot be “re-titled” cleanly until the estate has the legal power to act, and because valuation and transfer decisions can affect taxes, creditor issues, and beneficiary disputes.

The Statute

The primary law governing the estate’s ability to keep a business running during administration is 20 Pa.C.S. § 3314.

This statute establishes that the Orphans’ Court may authorize a personal representative to continue an estate business for the benefit of the estate and may set terms covering management structure, the estate’s and fiduciary’s liability for business obligations, the time period for operation, and related accountings.

Depending on the type of entity, other laws can also control what “transfer” means. For example, if the interest is in a limited partnership, the personal representative may be limited to transferee-type rights and information rights for estate-settlement purposes under 15 Pa.C.S. § 8674.

For valuation, Pennsylvania inheritance tax rules generally look to fair market value as of the date of death, and valuation disputes can have real financial consequences for the estate and beneficiaries. (If you’re also trying to determine whether the interest even belongs in probate, see which assets go through probate vs. pass directly to survivors in Pennsylvania.)

Why You Should Speak with an Attorney

While the statutes provide the general authority, transferring business interests is one of the most dispute-prone parts of estate administration. Legal outcomes often depend on:

• Strict Deadlines: Business valuations often drive tax filings and beneficiary distributions; delays can trigger penalties, interest, or court conflict if beneficiaries believe the estate is being mismanaged.
• Burden of Proof: A closely held business valuation must be defensible (and consistent with governing documents and tax rules). If beneficiaries challenge the number, the fiduciary may need to justify methods, discounts, and assumptions.
• Exceptions and Contract Limits: Operating agreements, buy-sell agreements, and partnership restrictions can limit who can become an owner, whether the estate receives only economic rights, and whether there is a mandatory redemption at a contract price. Getting this wrong can create personal liability exposure for the fiduciary or spark litigation.

If you’re dealing with an LLC interest specifically, you may also want to read transferring a deceased owner’s LLC membership interest during probate in Pennsylvania, because “ownership” and “management rights” are often not the same thing.

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Disclaimer: This article provides general information under Pennsylvania law and does not create an attorney-client relationship. Laws change frequently. For legal advice specific to your situation, please consult with a licensed attorney.