Part of a LLC, but my partner passed away?

Question

I was wondering what happens to the LLC, my partner passsed away. I know the company then disolves, but what about taxes, and our bank accounts etc... Just not really sure where to start.

Answer 1

Typically when a partner passes away, one of two things happen.
1) If your partner had a will, he may have left his share of the partnership to a beneficiary.
2) If he did not have a beneficiary, then my default you would typically inherit his part of the partnership. Hopefully there will not be an issue from his wife or children on this. You may need to hire a lawyer.
If you have an accountant,. they should know how to handle this. If you do not you may want to seek some advice on how you will need to file your taxes this year.
Your best bet would to find a very good accountant and have them handle all of the details with your partner passing away and how your federal and state tax returns need to be done.

Answer 2

You need to look at the LLC operating agreement. Unless it specifies that the entity will be dissolved upon the death of a member, then the entity will not automatically dissolve. This is one of the major purposes of a corporation - that it lives on beyond the death of individuals.

I assume that you and your partners were the only members. An LLC also does not automatically provide for right of survivorship. If your partner has survivors, his member interest may pass to them - or it may pass to you. Taxes, bank accounts, and all assets held by the LLC continue to be held by the LLC.

So - contact an attorney, get your hands on the operating agreement, and find out if your deceased partner had a will and/or trust set up. Good luck.

Answer 3

Start by calling an attorney. You need to take care of this the right way, or it can be a nightmare.