On Sep 10, 11:52 am, scott <scott.snowbo...[at]gmail.com> wrote:

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How did this S corp come about? In the absence of the divorce was the
S corp still supposed to be established or was it done solely to avoid
inclusion in the divorce? If the later, did the other offspring
knowingly and willingly go into this situation?

If the relevant wills or trusts set in motion the S corp, then the
bylaws should clearly indicate how members can leave, who can join,
how capital is injected into the company, and what is to be liquidated
to handle liabilities (and in what order). If this was done solely to
help out the divorced offspring, I see a potentially huge breach of
fiduciary duty by the executor.

Tell your friend to read the bylaws of the S corp. Also warn him that
if he doesn't want to face this problem everytime someone in the corp
dies, they should consider building in a liquidity source (such as
life insurance, investments, etc). In just a few generations there
could be dozens of beneficiaries. What are the chances they will all
see eye-to-eye all of the time?

On Sep 10, 12:37 pm, camg...[at]earthlink.net wrote:
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The estate is located in Indiana, which is not my state so I'm not
familiar on the details.

Thanks

On Sep 10, 11:52 am, scott <scott.snowbo...[at]gmail.com> wrote:
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What do the corporation bylaws say about the matter? Surely they must
address this issue.

Dave

On Sep 10, 9:52 am, scott <scott.snowbo...[at]gmail.com> wrote:
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What state are you in? I'm pretty sure that here in (community
property) California inheritances are separate property as long as you
don't co-mingle them.

Good Luck to all.

I have come across this senario and would like some comments.

This is as I understand the situation. Friend's parents died, leaving
a large farm to all offspring as beneficiaries. One of the offspring
is going through divorce or just got divorced and wishes to keep
estate settlement from exwife. Executor has worked with this request
and set proceeds of estate in a S Corp with all the beneficiaries as
owners. The beneficiaries wish to continue to hold the farm land as
an asset and draw income from the lease of the land, except for one
who wants to cash out. The S Corp does not have sufficient cash to
pay for an owner to cash out.

As I see it, the obvious options are:

1. Have the other beneficiaries/owners buy out the ownership of one
who wants to cash out.
2. Find an outside buyer for the ownership interest
3. Have the S Corp attempt to finance cash to party who wants out.
4. Sell part of the land to pay beneficiary who wants out

What else can folks think of?

Thanks