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The latest Q & A on a compliance issue, as provided by the League's General Counsel at Norman, Hanson & DeTroy.
Question: We have a deceased member who was the owner of a limited liability company. Does the court-appointed Personal Representative have the right to access the company’s account with the credit union in place of the deceased member?
Answer: The short answer is no, the Personal Representative does not have authority to access the company’s accounts. The deceased member’s membership interest in the limited liability company was his property, which is subject to the terms of his will (or intestate statute if no will was left). Depending on the circumstances, however, the Personal Representative may exercise the ownership rights to authorize himself to act on behalf of the company pending distribution of the membership interest. In that case, he could then access the company’s account. You should make inquiry as to who has what rights in the limited liability company at the time of death and who has rights post-death and get appropriate paperwork showing authorization for anyone new to access the company’s accounts. This holds true for corporations as well. For sole proprietorships, i.e., a “dba,” a Personal Representative may access those accounts (assuming there is no POD named).
For more compliance news, please visit League INFOSight through the Maine CU League's website.