Legal Question in Real Estate Law in California

Re: How to relinquish rights to partnership business

This is an interesting question, and a proper answer requires more clarity on whether the business is truly a partnership (as the leader on your question suggests) or something else such as a corporation, suggested by your reference to "shares."

If it's a partnership, your husband and probably your community assets are potentially liable for the business debts. Your separate property would presumably be safe. There are better ways to organize and conduct businesses nowadays than via the old-fashioned general partnership, and if the business is indeed a partnership, you should ty to persuade them to incorporate or form an LLC.

When a partner dies, the partnership does not cease to exist (dissolve), nor do(es) the heir(s) of the deceased partner become partner(s). The remaining partner(s) must decide whether to continue the partnership or to dissolve it. If he/they decide(s) to continue, they must buy out the estate or heir(s) in the manner set forth in the partnership agreement or, if no provision is made for buy-out, as provided by law (Corporations Code section 16701. If he/they decide(s) to dissolve, the heir(s) would be cashed out eventually as well, but under different statutory (or agreement) procedures. The best way to avoid personal contact and also get your fair share is to use an attorney, and it could be the same lawyer who did your estate planning or is handling the probate.

If the business is a corporation, what happens depends to some extent on how his shares are held and your interest -- community property, separate property, joint tenancy, etc. -- and how many heirs there are. You could wind up with 50%, but maybe less. He may leave his interest to his brother! Your best bet would be to have an intermediary (your lawyer) negotiate with the brother and with any executor or trustee besides yourself, to get fair value in the quickest possible time.

Re: How to relinquish rights to partnership business

Yours is a very complicated situation. I'm not sure why you want to do what you want to do other than you want no relationship whatsoever with your brother in law. The other side of the corneas aren't you giving up a substantial amount of assets to which you are entitled. There is a business decision, amoral decision and a rational decision to be dealt with here. Moreover there may be tax effects to which you are unaware. My other questionnaires are their problems with the gas station in terms of contamination with which you are concerned about responsibility. Fellows may not go away no matter what. What you need is an attorney who can ask you all the right questions and you can either answer or get him/her all the right answers. At that point you will be better served in terms of understanding your rights, duties and liabilities. You can make it better decision to see the alternatives much more clearly. You must do make an appoint with someone who is knowledgeable about business/real estate/and possibly other areas of the law.I have been practicing law in this legal area for over 30 years and understand your problem well. I practice in the S.F. Bay Area and if you wish to contact me call at 925-945-6000.

Re: How to relinquish rights to partnership business

LawGuru answers cannot exceed a certain number of characters and spaces, so sometimes it is necessary to split an answer in halves. Also, sometimes we have afterthoughts. So, to add to my prior answer:

1. It is usually possible to reject an inheritance. If there are tax or soil pollution problems, you can avoid them by disclaiming the inheritance in timely fashion. This won't work with property owned in joint tenancy, however.

2. I guess you don't communicate very well with your husband. You could always ask him to make changes in his will or trust or both to assure that you get other property and someone else gets the business.

3. You could benefit from some truly expert estate planning. It could save you big bucks on estate taxes and also perhaps make sure you get assets you want and avoid those you don't want as well as the possibility of getting flimflammed out of everything. Maybe you should have separate representation from your hubby since you have raised the possibility of a divorce. This might be especially useful if you are possibly subject to liability for problems in a general partnership.

Re: How to relinquish rights to partnership business

There should be a partnership agreement and a buy -sell agreement perhaps funded by insurance. Please contact me at 714 363 0220 for more information or in case your husband's brother refuses to agree to these documents.

Re: How to relinquish rights to partnership business

You do have a complex set of facts here. You need to sit down (along with your husband) to look at possible other methods of owning the business (corporation, LLC) and some estate planning for yourselves.