As you begin the estate planning process, you may soon discover that there are a wide variety of issues that must be carefully considered. Clearly, you’ll want to decide who should be the guardian of your minor children, who should receive your house when you die, and who should be in charge of administering your estate. It is also important to consider your business interests. Many California small business owners have a membership interest in a limited liability company. Without careful planning, dealing with the transfer of this membership interest after your death can become complicated and cumbersome.
4 Potential Options for Creating an Operating Agreement as Part of Your Estate Plan
As you create your estate plan, it is important to include an operating agreement with estate planning provisions to address your membership interests in an LLC. The following are a few of the estate planning options that may be available to you with regard to the operating agreement:
- Consider giving the personal representative of your estate the right to exercise your rights for purposes of settling the estate and administering your property.
- Consider giving the personal representative the power that the member had under the operating agreement to give an assignee the right to become a member.
- Consider giving these same rights to a guardian, conservator, or other legal representative of the estate should you become incompetent.
- Consider utilizing a trust in connection with the LLC. The trust can be a member of the LLC, so when you die, the successor trustee of your trust automatically is able to continue the membership interest rights and responsibilities without further action needed.
An experienced attorney can help you choose the best option for your needs in order to properly address your LLC membership interests as part of your estate plan. To learn more, we encourage you to contact us today at (714) 459-5481.