Legal Question in Business Law in California

Re: rights of heirs to father's co-owned business

What is wrong with this picture. Your father died in 2001, and you are just now getting around to consulting lawyers? See a probate attorney. Don't wait until 2007.

Re: rights of heirs to father's co-owned business

It sounds like your father was a 50% owner of the business when he died, though I can't be sure based on the limited facts you have provided. He and his partner may have had a contract which specified what was to happen upon his death, but if all it said was that the partner was to "do the right thing" then it probably has no legal effect at all.

Any portion of the business that your father owned at the time of his death should have become part of his estate. If the estate is still being probated, make sure that the executor knows about this issue.

If your father left a will, it should specify what is to be done with his property. If he didn't, the laws of intestacy will control.

Unless your father agreed in writing to let the partner take over the business, then the partner has no right to it. The executor can sue him for its return.

Whether you personally are entitled to all or part of the business will also depend on the contents of your father's will. If he had no will, the laws of intestacy will determine how much of it goes to you. The answer will depend upon whether he left a widow (whether she was your mother or not) and whether he has any other surviving descendents.

You should consult with a probate lawyer in your area about this matter.

Also, keep in mind that the company may not have been worth much or had much in the way of profits. The fact that your father put in $30,000 doesn't mean that the company ever recouped that investment. It may be that the partner lost money in the business, too. You may thus find out that there is nothing to recover at all.

Good luck.

Re: rights of heirs to father's co-owned business

Time passage is likely your worst enemy here. You may have some right or none. Need much more info. Contact good attorney asap to look at all facts.

Re: rights of heirs to father's co-owned business

Your question has a mish-mash of terminology that makes it very difficult, even (or especially) for someone who reads it carefully to understand what the heck was going on.

First, you talk about "partners," suggesting a partnership; then you refer to a business name, used at one time, containing "Inc." What form of business entity was in use at the time of your after's death?

Second, you describe the partner as an "executor," but you also say the business was in a living trust. Trusts have trustees, not executors.

If your father advanced money to the business, one would need to know whether this was a contribution to capital or a loan. Whether he or his estate is entitled to repayment or an adjustment in ownership percentage will follow from the answer to that line of questioning.

What is the current legal status of the estate? Still in probate?

If there is a trust, what provisions do the trust documents make for the operation and control of the business after the death of one or the other of the co-owners?

Is/was either co-owner married? If so, are there community interests in the business?

And on and on.

Due to the rather long passage of time, you need to get personal legal counsel as soon as possible, before the statute of limitations and/or possible erosion of remaining business assets cut off your possibility of recovery. I suggest having a conference with a business attorney, mentioning all the facts as well as the points raised by Mr. Hoffman and me.

If there is a strong possibility of mishandling of the business or its assets, the remedy may be a collateral proceeding within the probate or a separate lawsuit for an accounting and/or breach of fiduciary duty, etc.

Re: rights of heirs to father's co-owned business

Were you a beneficieary of the trust? Also, it depends on the trust. Was there any probate? Please call our office at 714 363 0220 for consultation and review of the trust.

Re: rights of heirs to father's co-owned business

The bottom line is that you should talk to a probate attorney. If there was a partnership agreement, the terms of that should be reviewed. Finally, if there was a trust, you are entitled to a copy, and it would show what was to happen to the estate and business.