Hi all:
I wonder if anyone else here has gone through this. Like many of us here, my business is a single member LLC owned completely by me. If I get hit by a bus or put a nail through my own brain, I’d want my wife to be able to sell the business, my tools, etc. My existing will leaves all my possessions to her, but I wonder if that includes ownership of the business and if I need special language to allow her to have access to business bank accounts, etc.
I’ll get to a lawyer sooner or later, but has anyone here set up some arrangement for themselves and can enlighten me? Is an LLC different from a corporation? Are there big differences among states?
John
Replies
This is funny you are posting this. Im a single member LLC and me and the wife were just discussing this issue last week.
This is what we are going to do. Put her on the bus. account at the bank. and make her a member of the company.
Bolth are easy to do. As for her being able to take everything if we get divorced well thats always possible :) but as far as im concerned she has built this bus. as much as me and id hate to see things get screwed up if i were to die.
By the way my attorney is listed as an inactive member of my business, im not sure if you could arrange your attorney to do the same thing and take care of the bussiness dealings if you were to pass.
Good luck.
To totally destroy any semblance of seriousness, I read these posts, and was immediately struck by these two excerpts:
“If I get hit by a bus or put a nail through my own brain…â€
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“This is what we are going to do. Put her on the bus…â€
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So, is the point to put the wife on the bus that runs you down????
Now back to the point.....
Yah, make a new plan stan...
decoy roy, all htat.
I think after he bites it, nail thru the brain, then she gets the will and hops the bus for Mexico.
P:
Interesting. Now, I didn't originally set up my LLC that way because I was under the (possibly false) impression that if my business was ever sued or affected by some other legal issue it would be better not to have my wife involved. In other words, I would take the hit but she could possibly escape legal trouble. I haven't the faintest idea if that is really the case, though.
Another point I was making to my wife is that, aside from the value of my tools and assets in the business accounts, there is goodwill value in the name and the viability of the business. She could sell off the name and the business if she wanted.
I dunno, but I do need to see a lawyer about all of this. I read somewhere else that a living trust is the best way of handling this problem, but I don't know much about that either. Maybe one of the legal types on this forum will have an answer...
J.
it may open you up more for for liability issues if she is a member, but remember an LLC gives you much the same protections as a corporation. If your wife does not drive a company vehicle or equipment or does nothing but have her name on a piece of paper then "she" will not inherently add liability to your bus.
If you as a member and owner were to say run over somebody in an intersection with the company truck then you are going to get sued personally and your business is going to get sued. (your screwed) this is why my att. told me to always have my employee drive me around instead of visa versa.
So as far as my buss. is concerned i am willing to add my spouse on as a member because she does not ad any more liability to the business than i already do everyday.
But as you stated you are going to check with an attorney for other options. I think that is a smart idea.
I don't think the issue would be the wife adding liability, it would be the wife exposing assets to a future legal action, assets that would be out of reach if she was not on the LLC.
I don't think the issue would be the wife adding liability, it would be the wife exposing assets to a future legal action, assets that would be out of reach if she was not on the LLC.
Yes and that worries me, and is a good point. But would she be opening up any more assets than what i do everyday? My assets are her assets, eveything we have other than buss. stuff is jointly owned.
If so how?
She works in the office only. does not drive a company vehicle. Does not work in the field.
I dont know, maybe i'll see the attorn. that set my LLC up and seek advice before i make any moves.
If she doesn't have any assets in her name only, then probably not. But I don't know the details of your situation. Does she have an inheritance (either now or in the future) that is in her name only? Does she have a 401(k) or IRA? Family property on her side?Your assets may be her assets, but are her assets your assets? And will the situation ever change?Seeing your attorney is the best advice.
Ya, i was thinking about this while my eye lids were getting heavy last night.
You are 100% correct, and i will seek out prof. advice.
Even though i was not the O.P. thanks to all that commented it has changed the way we are looking at this issue.
Off to work i go.
"there is goodwill value in the name and the viability of the business. "I don't know what kind of business that you have or how big it is, but if you have say only a couple of employees and you are the main employee then there is really not much in good will to sell..
.
A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.
B:
My company name is Enduring Charm LLC, which is trademarked and servicemarked, along with my tag line: Authentic character for your home. Now I run a contracting company under that name, but down the line I plan on opening a retail operation under this name too. There is certainly the possibility of selling this name or the business under it for a modest sum should I take a hit. I agree with you that "Joe Smith Carpentry" would have limited appeal, but I believe my company name would have a better chance for sale. Maybe enough to pay for a nice party at my funeral.
J.
You have to talk to a lawyer because the, er, devil, is in the details.
An LLC is a "limited liability company" which basically means that the shareholders of the company are not liable for the corporation's obligations (like a corporation.)
Note that the owner (aka "member" - a state specific term) is liable for his/her own actions: if the owner of a single member LLC screws up, he/she won't (probably) be liable as a shareholder, but could be liable as the person who screwed up.
Ownership would pass as property, but there could be significant control issues during probate.
May your whole life become a response to the truth that you've always been loved, you are loved and you always will be loved" Rob Bell, Nooma, "Bullhorn"
"We Live" http://www.youtube.com/watch?v=7kuBgh0VCqI&mode=related&search
And Annie Ross's "Twisted" http://www.youtube.com/watch?v=8lqivrCIRGo&mode=related&search=
i don't know how to spell lauyer so take it for whats it's worth. first the one risk that you are taking by putting your wifes name on the co. documents are,if she does something to get sued,the could also get into your business assets.
i have been inc. once,for me never again. you have this false sense of security that if you hook a 22o to the bath faucet they can't sue you.they can and they can sue your inc. also. in todays world even if they don't win they bankrupt most people with legal fees.
carry lots of liabilty ins is the best ,if you can afford it.
you do need to get all your questions together and sit down with one of them lauyer guys and know where your at. i should heed my own advice.larry
if a man speaks in the forest,and there's not a woman to hear him,is he still wrong?
BTW, there is some really bad "legal" analysis in this thread.
May your whole life become a response to the truth that you've always been loved, you are loved and you always will be loved" Rob Bell, Nooma, "Bullhorn"
"We Live" http://www.youtube.com/watch?v=7kuBgh0VCqI&mode=related&search
And Annie Ross's "Twisted" http://www.youtube.com/watch?v=8lqivrCIRGo&mode=related&search=
Another thing to consider is if you own 100% of the business, when you die your wife inherits the entire thing and the whole amount could be subject to estate taxes if the business is worth a lot. If she owns 49%, when you die she only inherits the other 51%, which could reduce or eliminate the tax burden. I'm not a laywer, don't pretend to be, don't play one on TV, and didn't stay at a Best Western last night, so take the above advice for what it's worth. (Though I did hear it from an attorney if that counts for anything.)
There exists an unlimited "maritial deduction" for estate tax calculations.
Your point only has merit when referring to Her beneficiaries.
Is it possible this could relate more to state taxes?
Estate taxes are federal. Inheritance taxes are state.
A good visit with a Certified Financial Planner that specializes in Estate Planning would be the OP's best and lowest cost approach to begin. If he needs a lawyer after that, the CFP will tell him for what.
The Op should be prepared to complete a total disclosure of all assets, liabilities, business ventures, insurance policies, goals, and past financial history. Along with the full families names as well as any business partners.
Only with the full picture in front of him (her), can a professional be able to properly advise on the best route.
Once that best route is known, you also need to understand how to behave within that structure.
A good advisor will provide you with all that.