Leaving A Sole-Member LLC To Child Rather Than ... - Legal Forums

Please forgive the length. I want to offer as much relevant data as possible to receive the best answer... My father owns a company where he is now the sole member of the LLC. He recently bought out his remaining partner which is the catalyst for needed changes in estate planning. My father has decided that the company will now be left to me in the event of his death since there are no partners. Other than him, I am the only officer of the company and have worked full time for the company for half of its existence.

My father is married, and his wife has vocalized her disdain with his choice to leave the company to me and believes that the company should be liquidated upon his death with her as the sole beneficiary of the proceeds after any creditors are paid (presently, our only debt is a few vehicle loans). The company has recently modified insurance policies since he is now the sole owner. The policy modifications included adding me to a policy (along with his wife) so that I am not disadvantaged to maintain operations and the addition of a new policy where his wife is the sole beneficiary. Her share of the first policy and the total of the new policy are equivalent to what she might receive in the event of a sale based on the company's value today. Alas, she is still not satisfied.

My questions are as follows:

1. Does the LLC?s operating agreement need to be amended to identify me as my father?s successor?
2. How should the assignment of the company to me be handled in his estate planning to ensure that there is no doubt the company goes to me? Does he need to establish a Family Trust?
3. Until the necessary steps are taken to ensure the company is properly assigned to me, what are his wife?s rights as Surviving Spouse in the event of his death? Is the LLC considered Community Property without the appropriate changes to meet his wishes?
4. Even with the necessary changes in paperwork, does she have any potential claim to the company following his death?

I am completely dismayed by the comments from this normally kind and giving woman. My dedication to the 45 people we employ, to the customers who count on our unmatched services and to my own family, who have sacrificed so much in terms of finances and time together to make the company a success, are my driving factors to set up the proper paperwork. If something were to happen to my father and the proper paperwork is not executed, she would shut the doors the same day despite the life it has afforded her. Thank you so much for any guidance you can offer.

Additional facts:

• Company operates and father/spouse reside in Virginia.
• Father/spouse file taxes jointly.
• I am an only child.
• Father?s health has declined in the last year.
• Father?s wife is not on payroll and has no responsibilities related to the company.
• Father/spouse have done some estate planning already that has divided all other assets but it does not include the company.

Source: http://www.isitlegalto.com/virginia-state-laws-legal-forum-virginia-laws/29060-leaving-sole-member-llc-child-rather-than-surviving-spouse-virginia.html

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