club_cafe: Member death

iras1 on

You could have a major headache. Most agreements state that notice of death is the equivalent of a request for a full withdrawal. Then the club follows its withdrawal procedure and makes the payoff check payable to the "Estate of [name], deceased".

As it is, you have a member who can't vote his shares (unless you believe he can talk to you from the other side). I guess theoretically, you have a new member, the executor of the estate, whether the executor wants to join the club or you want the executor in the club. You have income accruing to an estate which will need to be reported separately from the income which accrued to the decedent before death.

My recommendation would be to quickly amend your agreement to follow the NAIC model agreement, process the withdrawal and send the check to the last known address of the decedent (unless the executor directs otherwise).

Ira Smilovitz

In a message dated 12/9/2004 2:20:39 P.M. Eastern Standard Time, rokomo@bivio.com writes:

We have had a member pass away and our bylaws do not
indicate the procedure to withdraw this member. He is a
partner in the club and my question is the procedure in time
of withdrawal.
He has a Trust and we have not received anything from the
family as to the death or the date they wish to withdraw. Is
it customary to wait for the executor's request or let the
amount ride until they request it. It might be that they
would want to wait until 2005 because of the Tax situation.
Would appreciate any comments.

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