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A Trustee dies of a trust which is a member of the LLC. Do we have to do anything?
Anonymous2 views3 answers
We have a LLC which has several members as revocable trusts. One of the trustees passed away and there is now a successor trustee.
Do we have to do anything, because my understanding of reading our operating agreement is that we only have to do something if a member dies (quoted as "triggering event"). But since the trust is the member, I don't think it died, only the trustee. So, does that trigger anything?
I am so confused.
I think you are correct, since a revocable trust can not die. Also, since the trust still exists and a successor trustee has taken office, there has been no change to any LLC member. So you do not have to do anything. However, without reading the documents this should not be taken as a definitive opinion; you need to meet with corporate counsel to be sure.
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The LLC should record the name and address of the new trustee. If the deceased trustee was the settlor of the trust, and the trust is now irrevocable, the LLC should request a tax ID number for the trust as this may be needed for tax forms later, like a K-1 or a 1099.
The trust is a separate legal entity so as a member of an LLC it does not die when the trustee dies. Therefore, you should not have to do anything.
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