New Jersey Mortuary Science Practice Exam

Which term describes a firm that continues operating when the owner has died and is not under corporate management?

1. Operating under an estate

2. General license operation

3. Inactive status operation

4. Temporary firm operation

The correct answer is: Operating under an estate

The term that describes a firm continuing to operate after the owner's death, without being under corporate management, is "operating under an estate." This concept implies that the business continues its operations as part of the deceased owner's estate, which is managed by an executor or administrator while the estate is being settled. This arrangement allows for the business to maintain its operations, potentially preserving its value and providing for employees and clients during the transitional period. The distinction here lies in the management structure post-owner's death; the estate takes on the responsibility for the firm's continuity. This differs from the other options, which do not specifically address the operations of a business under these circumstances. General license operation, inactive status operation, and temporary firm operation convey different circumstances that do not capture the legal and managerial nuances involved when a business runs under an estate setup.