What Happens to Your Closely Held Business When You Die in Georgia?

If you own a closely held company, your death doesn’t automatically decide who can run it, who receives your ownership interest, or whether the business continues. Business succession planning in Georgia lets you address those questions while you can still coordinate them with your estate plan.

At Turner Law, LLC in Decatur, we help business owners connect succession, estate, and tax planning before those decisions fall to an executor, family members, or surviving owners.

Does Your Business Interest Become Part of Your Estate?

For federal estate-tax purposes, the IRS says the gross estate generally includes business interests you own at death and values them at fair market value. That tax rule doesn’t, by itself, decide who may manage the company or receive your ownership interest.

Those questions can depend on the business structure, governing documents, estate plan, and Georgia law.

What Happens to a Georgia LLC When a Member Dies?

Georgia law provides a default rule. Unless the articles of organization or a written operating agreement say otherwise, a deceased member’s legal representative generally receives the rights of an assignee of that member’s LLC interest.

If the deceased owner was the LLC’s last member, a separate rule generally makes the legal representative a member unless that representative elects not to become one within the statutory period or another period provided by the operating agreement.

A Georgia business succession plan should account for those LLC documents instead of assuming a will settles every ownership and management question.

What Should a Succession Plan Address?

The right plan depends on the company and ownership structure. Questions worth resolving include:

• Who should own the business after your death?
• Who should have authority to manage it?
• Should another owner or key person have an option to buy your interest?
• How should the ownership interest be valued?
• Do the business documents work with your will, trust, and tax plan?

Through our business succession planning work, Turner Law helps closely held business owners plan for the next generation of ownership before a transition is forced on the company.

How Do Tax and Valuation Questions Fit In?

Tax questions won’t affect every estate the same way. For estates subject to federal estate-tax reporting, IRS valuation guidance directs examiners reviewing closely held business interests to consider governing documents and buy-sell agreements.

Robert Turner has a law degree, an MBA, and an LL.M. in taxation, and Turner Law handles estate and tax planning. His background spans both areas, which can come into play when estate planning for business owners overlaps with succession and valuation.

FAQ

Do I need a succession plan if my family already knows who should take over?

A family understanding doesn’t replace the company’s governing documents. Written planning can address ownership, management authority, valuation, and buyout terms before those questions have to be sorted out after your death.

Can my will alone decide who controls my Georgia LLC?

Not necessarily. Georgia’s default rule for a deceased LLC member expressly allows the articles of organization or written operating agreement to provide otherwise. Your will and business documents should be reviewed together.

Plan for the Business You Built

Turner Law, LLC helps business owners in Decatur, the greater Atlanta area, and throughout Georgia coordinate business succession with estate and tax planning. Attorney Robert Turner has more than 25 years of legal experience and an LL.M. in taxation. Contact Turner Law for a free initial phone consultation about what should happen to your business when you’re no longer there to run it.

Posted on the behalf of Turner Law, LLC