* Well, that asterisk. Due to state court rules in many states, if you`re trying to sue an estate, you need to use the correct name. And that is what this question is about. Whether it is an S or C corporation, if an existing corporation is to be used for estate planning, gifts, and valuation discounts, it may be necessary to recapitalize to have both voting and non-voting shares. Since estates are not natural or legal persons and cannot bring an action or action, an action must be brought against an administrator or executor representing the estate. In the event of the death of a person without succession in respect of land or personal property, the estate is held in trust by his or her personal representatives who are authorized to sell it. This article focuses primarily on aspects of estate planning and the use of partnerships and LLCs, which are taxed as partnerships. 1. maintain control and management of the company`s assets; 2. increase the value of the company`s assets; 3.
the protection of business assets against creditors` claims and divorce; 4. consolidation of the fractions of assets transferred to the company; 5. facilitate and simplify gift giving and ownership within the family; 6. Provide flexibility in business planning that is not available through trusts or corporations. For the avoidance of doubt, the fact that personal representatives have a legal title that may be the subject of litigation does not generally mean that they are personally liable (i.e. they may be compelled to pay for assets that are not part of the estate). They can be held personally liable, but only if they have breached their fiduciary duties. When business matters are of paramount importance over estate planning issues, the choice is often limited to one of the corporate entities or LLC. If there is an operational business with employees, there may be some advantages for business forms (e.g. benefits, etc.).
If the business is primarily real estate, an LLC taxed as a partnership is usually the best choice because of the general similarity of state laws and tax-exempt contributions and distributions. Many states, including Georgia, have very good LLC laws that include provisions that should help support valuation reductions in an estate, such as: Provisions that provide that an LLC will not be deemed terminated until an event occurs that results in the “termination of membership” with respect to the last remaining member, and provisions prohibiting a member from unilaterally leaving the LLC. This question is inspired by the discussion in the comments of this response to another question. In these comments, I argued that the estate of a deceased person is not a corporation and that it is the personal representatives (executors, if executed, administrators if they are intestate intstate) who have legal ownership of the property of the estate and can sue and be sued in respect of that property. This assertion has been questioned by many people, which leads me to wonder if it varies from one province or territory to another. Deceased estates usually exist as a separate legal entity from the deceased. The succession arises automatically upon his death. Generally, any beneficiary who receives more than $600 from the estate must file a tax return for income from this type of estate.
In addition, a non-resident foreign national must submit an application, regardless of the amount. The estate ends automatically when all assets are distributed, usually within two years of the date of death. A number of States now offer four choices of partnership unit. For many years, the only options were a general partnership and a limited partnership. In a partnership, all partners are “general partners,” meaning that each partner can bind the partnership and no partner has liability protection against debts or claims against the partnership. In a limited partnership, there are both general partners and limited partners. Limited Sponsors have limited liability, but Limited Sponsors have limited authority to act on behalf of the corporation or to participate in the administration of the corporation. Until a few years ago, the traditional limited partnership was often the method of choice for estate planning.
Deceased estates first enter the probate procedure. The estates of deceased persons are administered by a lawyer or trustee appointed by will or appointed and sworn by the court. This person is responsible for liquidating the estate by first paying the unpaid taxes and debts of the estate. Then, an obituary is issued to inform the public and potential creditors or interested parties. The Administrator shall communicate with all known parties to contracts and agreements and with the beneficiaries listed. If there is a will, the estate decides if it is valid. Upon approval, the administrator begins distributing the assets on the basis of debts, will, and state law. In the absence of a will, the State appoints the heirs on the basis of State law. There should always be business reasons to create an entity, even though it`s clear that “estate planning” is a major reason. The business rationale for incorporation must be stated in the partnership or operating agreement of LLC.