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Ask a Lawyer -- Corporations
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Question: I have an S Corp of which I am the President and only shareholder. Upon my death, what would happen to my company? Is it covered in my will, and I can pass it to my husband? Does it go through the probate process? What are my options for making the dissolution as simple as possible? Thank you for your help. Response: If you do nothing, the S corporation stock shall become part of your probate estate. Is it covered by your will? Yes assuming either (a) you have made a specific bequest of your S corporation stock in your last will or (b) your will has a residual clause that disposes of the "rest, residue, and remainder" (or words to that effect). As far as dissolution, that is left up to the heirs. The first step will be for the new shareholders to elect new officers. Then the controlling shareholder must decide if he/she wishes to continue the corporation or liquidate. In my mind, the key is to avoid probate. You should sit down with an estate planning attorney to get options for this issue in your state. Ask the attorney whether or not TOD (transfer on death) designation can be made for closely held stock in your jurisdiction. If so, that is the easiest route for designating a beneficiary while avoiding probate. The use of a revocable trust and joint ownership of the stock with your husband are other options to avoid probate. Submitted: 02/26/2009; Jackie, OK Response: 02/26/2009; JJR Add A Comment |
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