Many people set up single-member limited liability companies for their business or to hold title to investment real estate. There’s several advantages to this, not the least of which is in the title: limited liability. However, in two instances recently, I’ve handled real estate transactions in which the sole member of an LLC has passed away, and the title company is reluctant to or even refuses to insure the title.
Why? Because the owners set up their limited liability companies without thinking about what will happen if they die. Without proper planning, any interest you have in an LLC becomes a part of your estate, and your heirs will need to probate an estate in order to obtain court authority to transfer that interest — even if that’s the only asset you have that needs to be transferred.
Worst of all, since claims of creditors of your estate must be paid before your assets can be transferred, your loved ones may have to decide between paying any claims out of their own pockets or selling assets of your LLC to pay them.
There’s hope in Ohio’s Uniform Transfer-on-Death Security Registration Act. It’s a little known fact that the provisions of Ohio’s TOD act can also be used to make your interest in an LLC transfer on death as easily as a bank account . . . IF, that is, you go through the right procedures. Unlike banks, insurance companies and investment companies, your LLC may not have securities transfer agents to register membership certificates for you, but the statute does lay out a pathway which allows you to do this without one.
As a title insurance agent with more than twenty years of experience in the industry, I’ve developed a series of documents which comply with Ohio’s TOD act, avoid the probate process, allow your beneficiaries to step in and take over running the company you’ve built right away, and remove nearly all of the delay, complications and expense. We will prepare these documents and meet with you to review and sign them for $200.00 per company.
How do you know if you need this? We can help there, too. Just give us a call and I’ll have a look at what you’ve got. If you are one of the few who will not benefit from this, we won’t charge you.