[WSBARP] Corporate assets and probate

[Heather Kolbly]

Thanks everyone for your help on this!

 

Heather Kolbly

 

From: wsbarp-bounces at lists.wsbarppt.com [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Eric Nelsen
Sent: Monday, January 12, 2015 11:44 AM
To: WSBA Real Property Listserv
Subject: Re: [WSBARP] Corporate assets and probate

 

Hi Heather--What Roger said. Think of the corporation as a separate person--it didn't die, just the decedent did. So decedent's Inventory lists "100% interest (X shares) in and to Corp XYZ" and then to value it, you appraise the corporate entity, not just its assets. Of course the assets have a bearing on valuation of the entity, but the valuation needs to consider corporate liabilities and so forth as well.

 

For the closely-held corporations, list the "30% interest (Y shares) in Corp ABC" and valuation is still of the entity, but valuation of the 30% interest is a little trickier because it may need to be discounted for lack of marketability and lack of control. All that is done by a business appraiser, if the Estate thinks valuation needs to be fully documented in a way that would, for example, stand up to an IRS audit.

 

On your questions:

 

1. Yes, shares pass as any other asset under the Will. But check for a Shareholder Agreement for the part-owner corporations; those sometimes have restrictions on transfer.

 

2. Yep.

 

3. If the main probate is here, probably easiest to deal with share transfers here rather than in Oregon. I don't know Oregon's rules on ancillary probate but it's possible that there is only authority to handle the real property down there, when probate has been opened first in Washington.

 

Sincerely,

 

Eric

 

Eric C. Nelsen

SAYRE LAW OFFICES, PLLC

1320 University St

Seattle WA  98101-2837

phone 206-625-0092

fax 206-625-9040

 

 

 

From: wsbarp-bounces at lists.wsbarppt.com [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Heather Kolbly
Sent: Monday, January 12, 2015 8:20 AM
To: 'WSBA Real Property Listserv'
Subject: Re: [WSBARP] Corporate assets and probate

 

Hi All,

 

I am handling a probate where there are corporate assets held by Decedent, and I could use some guidance on how to handle those in the probate of D’s estate.  I know corporate assets typically pass outside of probate, but my questions are:

 

1.       If the corporate formation documents are silent as to what happens when a shareholder dies, do the corporate assets held by D then simply pass to her beneficiary named in her Will (in this case, there is just 1 beneficiary – D’s son).  There are 3 corporations here (2 in WA and 1 in OR); in a WA one, D was sole owner/shareholder, in the other two (WA and OR) she was part owner with 2-4 other people.  

 

2.       Whether the corporate formation documents do or don’t state a procedure for what happens to assets when a shareholder dies, do those assets still get reported to the court in the probate process?

 

3.       There is an ancillary probate in OR in this case for other OR assets (real property), and the OR attorney handling that said that the OR corporation should pass through the WA probate.

 

= I am confused.

 

I appreciate any help you can offer!

 

Heather Kolbly

 

 

Heather Tobin Kolbly

Mobile Attorney 

KOLBLY LAW FIRM, P.C.

Mail:  704 228th Ave. NE #122, Sammamish, WA  98074

Office:  (425) 522-4234 s Cell:  (425) 444-1888 

 <mailto:Heather at KolblyLaw.com> Heather at KolblyLaw.com

 <http://www.kolblylaw.com/> www.KolblyLaw.com

                           

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