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Ask The Experts: How is family business passed on?

By Claudia Buck, McClatchy Newspapers –

A daughter’s rights to a family business and a mother’s concerns over family loans. This week, those topics are addressed by Robin Bevier, a Gold River, Calif.-based estate planning attorney.


QUESTION: My father died in Florida about a year ago. My mother and I worked alongside him to build a successful business. (They were divorced years ago after 25 years of marriage.) I live in California but visited my father and his current wife many times, called frequently and was with him in his last days.

He and my stepmother were married for 32 years, but she always declined to be involved in his business. She and I are on good terms, but, when she dies, I believe the estate will go to her son. Do I have any rights?

ANSWER: Regarding your father’s business, there are several issues to consider. First, if you have an ownership stake in the business, that interest is yours.

For your father’s portion of the business, if he had a will or trust, those documents would control to whom his business interest is distributed. It could be, for instance, that your father gave the business income to his wife, but preserved the ownership for you.

If his wife receives his interest without any restrictions, it is up to her to determine who will receive it at her passing. She could then leave it in her will to you or anyone else. As to other potential rights, it would depend on any written agreements between you and your father.


Q: Is it possible for a revocable living trust to be the lender in a loan agreement? I’ve lent my adult children varying amounts from my trust’s bank accounts. After my demise, I want these loans to be considered fairly.

A: A family trust can lend funds to a third party, including a relative or child. If there is written documentation or a promissory note of each loan, it would show that your trust is the lender.

A written promissory note would be sufficient to document the loan as an asset of the estate, to assure it is accounted for properly. In addition, you might consider listing the note/loan in your trust’s schedule of assets.

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