Divorce or Death of Husband/LLC funds

What is the name of your state? NC

My husband and I have an LLC that is a construction company operating under his GC license. We are both managing members of the LLC

My questions are

1. In case of a divorce, will the LLC disolve and the funds be dispersed 50/50? and if not what type of filing needs to be done so that I can be sure assests will be split 50/50 upon divorce?

2. In case of death of a manager, can the deceased leave a will stating that their portion of the assests be left to another person? i.e. a Daughter? Or does the LLC dissolve with the remaining assets dispersed to the managing members? What steps need to be taken to prevent a manager from leaving their portion of the assets to another individual?


Please do not tell me to contact a Lawyer, I already know that is my best option for getting my questions answered. I am just interested in your experienced feedback. Thanks for your input

drea15ss said:

What is the name of your state? NC

My husband and I have an LLC that is a construction company operating under his GC license. We are both managing members of the LLC

My questions are

1. In case of a divorce, will the LLC disolve and the funds be dispersed 50/50? and if not what type of filing needs to be done so that I can be sure assests will be split 50/50 upon divorce?

2. In case of death of a manager, can the deceased leave a will stating that their portion of the assests be left to another person? i.e. a Daughter? Or does the LLC dissolve with the remaining assets dispersed to the managing members? What steps need to be taken to prevent a manager from leaving their portion of the assets to another individual?


Please do not tell me to contact a Lawyer, I already know that is my best option for getting my questions answered. I am just interested in your experienced feedback. Thanks for your input

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In the case of divorce, you would both still own your individual share of the LLC. You would both remain managing members until you came to an agreement regarding how to share the assets of the LLC.

You could disolve the LLC and split the assets, or one of you could buy the other one out, or you could continue to operate the LLC as business partners, even though divorced.

As far as what happens if one of you were to die, normally that is addressed in the membership agreement for the LLC. That's fairly standard. However, if your membership agreement does not address that, then the ownership would transfer to the estate of the deceased, and eventually to the heir(s) of the deceased.

The bottom line though, is that in a divorce nothing automatically happens. The two of you either come to an agreement on what is to happen, or a judge decides.

thanks

LdiJ said:

In the case of divorce, you would both still own your individual share of the LLC. You would both remain managing members until you came to an agreement regarding how to share the assets of the LLC.

You could disolve the LLC and split the assets, or one of you could buy the other one out, or you could continue to operate the LLC as business partners, even though divorced.

As far as what happens if one of you were to die, normally that is addressed in the membership agreement for the LLC. That's fairly standard. However, if your membership agreement does not address that, then the ownership would transfer to the estate of the deceased, and eventually to the heir(s) of the deceased.

The bottom line though, is that in a divorce nothing automatically happens. The two of you either come to an agreement on what is to happen, or a judge decides.

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First, I just want to thank you for your great input.

Second, I want to ask you a new question that you may know the answer to or you may be able to tell me where I should start looking.

As far as the membership agreement. Is that a standardized state form or is this something that my husband and I should have already written and signed? When my husband started this LLC he filled out a standardized Articles of Organization form. However, I was not added as a managing member until a later year and we did it through the annual report filing.
If this is something I need to write (which it sounds like it might be). Do you know where I should look for guidelines for writing a membership agreement?

I also have another question. How do I protect $$ that is in a joint checking account. i.e. Is there such a thing as joint checking with rights of survivorship? I don't want to be putting $$ in a joint checking and then have half left to my 1year old daughter should my husband pass away. Can you suggest a better way to arrange finances so that the $$ is protected?

Again, thank you for your reply.

drea15ss said:

First, I just want to thank you for your great input.

Second, I want to ask you a new question that you may know the answer to or you may be able to tell me where I should start looking.

As far as the membership agreement. Is that a standardized state form or is this something that my husband and I should have already written and signed? When my husband started this LLC he filled out a standardized Articles of Organization form. However, I was not added as a managing member until a later year and we did it through the annual report filing.
If this is something I need to write (which it sounds like it might be). Do you know where I should look for guidelines for writing a membership agreement?

I also have another question. How do I protect $$ that is in a joint checking account. i.e. Is there such a thing as joint checking with rights of survivorship? I don't want to be putting $$ in a joint checking and then have half left to my 1year old daughter should my husband pass away. Can you suggest a better way to arrange finances so that the $$ is protected?

Again, thank you for your reply.

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Ok...as far as the LLC is concerned, you two obviously didn't do it properly.
Normally the membership agreement is something that is filed with the Articles of Organization. However its not too late. However I do recommend that you get a consult with an attorney. It won't cost an enormous amount of money to get one properly drawn up.

As far as joint bank accounts are concerned....if one of the parties dies, the funds automatically belong in full to the other party. They aren't part of the deceased's estate.

No, we obviously did the LLC wrong..and I think there are many people out there doing it wrong unfortunately. What type of attorney should I contact to get those types of agreements drawn up? and I'll contact a few in town to check on pricing etc.

Thank you for your knowledge.

drea15ss said:

No, we obviously did the LLC wrong..and I think there are many people out there doing it wrong unfortunately. What type of attorney should I contact to get those types of agreements drawn up? and I'll contact a few in town to check on pricing etc.

Thank you for your knowledge.

Click to expand...

You would want an attorney that specializes in corporate or business matters.

Whether or not you are a partner in the LLC or are even listed as an employee has no effect in the Equitable Distribution of the LLC as a marital asset during divorce.

Read CROWDER v. CROWDER