Legal Question in Wills and Trusts in Alabama

Re: LLC Issues

Unless his LLC Operating Agreement specifies differently, husband's LLC will either pass pursuant to the disposition of assets in his will, or based on Alabama intestacy statutes if husband doesn't have a will.

During husband's life, his income from the LLC passes directly through to him and is reported on his, or his and wife's, personal income tax return. The executor of husband's estate or wife will need to file a tax return for the year of husband's death. Any income earned from the LLC (including any income from the disposition of assets belonging to the LLC) will be reported on that tax return, just as husband would have reported it during his life. The estate and/or wife will be responsible for income tax due, just as if husband had been alive. At husband's death, wife, or wife along with husband's executor, should consult an accountant to determine the most advantageous way, from a tax standpoint, to handle the disposition of the LLC assets and handle the tax return for the year of husband's death.