No. The club doesn't have to deal with it, the individual member or his/her executor has to deal with it. The club operates according to its partnership agreement. If a member divorces, s/he remains as the sole member unless the club receives instructions otherwise. If the membership interest is divided as part of the property settlement, the club retains the right to accept the ex-spouse as a member or to process a withdrawal for the value of the ex-spouses interest.

 

Similarly, in the case of a death, the club processes a full withdrawal. The executor determines the correct distribution of any assets owned by the decedent.

 

Ira Smilovitz

 

If you live in a community property state, don't you still have to deal with death and divorce?