[WSBAPT] Partition Action Involving Estate's Interest

Eric Nelsen Eric at sayrelawoffices.com
Tue Sep 12 11:54:19 PDT 2017


I don't think sale of the real estate is mandatory; the heirs of the Estate will receive the decedent's LLC interest as transferees. But they will receive the economic interest only, and are not admitted as members (with authority to manage the LLC) without the consent of the survivor. So they'd be entitled to distributions but not have any right to manage.

At death, the decedent automatically "dissociated" from the LLC, and the Estate can't exercise management rights except as specified in RCW 25.15.131(5)<http://app.leg.wa.gov/RCW/default.aspx?cite=25.15&full=true#25.15.131>. The heirs would eventually be transferees is the LLC isn't dissolved.

I think in order to dissolve the LLC you'll need to meet the requirements of RCW 25.15.274<http://app.leg.wa.gov/RCW/default.aspx?cite=25.15&full=true#25.15.274>in some form, and on your facts as stated I'm not sure I see enough to get there. Maybe it's enough to demonstrate unfairness in having economic control completely remain in the hands of the survivor, but it depends heavily on what the understanding was, what the property is and what it's used for, etc.

If you dissolve, the procedures for winding up are in RCW 25.15.297 et seq.<http://app.leg.wa.gov/RCW/default.aspx?cite=25.15&full=true#25.15.297> It might or might not involve sale of the real property--most likely will, if that's the principal asset and there is no good way to make equal distributions without reducing to cash.

If you do go for a judicial dissolution, I agree it's a standard civil action for dissolution of the LLC, not a TEDRA action. I don't think you need a partition cause of action if title is in name of the LLC; the manager(s) in charge of the LLC can simply sell the property on the open market as part of the winding up process.

Sincerely,

Eric

Eric C. Nelsen
SAYRE LAW OFFICES, PLLC
1417 31st Ave South
Seattle WA  98144-3909
phone 206-625-0092
fax 206-625-9040

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From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Robert West
Sent: Tuesday, September 12, 2017 11:09 AM
To: wsbapt at lists.wsbarppt.com
Subject: [WSBAPT] Partition Action Involving Estate's Interest

Real property is owned by an LLC, the members of which are one living person and the estate of the decedent member (my client).  There is no operating agreement. The property needs to be listed and sold.  The living member  refuses to cooperate in selling the property.  It seems to me that a combination action to dissolve the LLC and partition the assets is the appropriate course of action.  I don't believe this is subject to TEDRA since the living member is not an heir.  I'd appreciate receiving comments or suggestions.

Bob West
rwest at westlawoffices.com<mailto:rwest at westlawoffices.com>






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