Death of Sole Shareholder With Revocable Trust

Question: My father, sole stockholder of his architectural business and corporation, passed away. He had a revoable living trust with pour-over will leaving everything equally to my brother and I. His business has no activity and any remaining funds were disbursed to pay business debts. We want to dissolve the corporation. I am trustee and executor of trust and will. Is it correct that my brother and I can as heirs to the stock - have a shareholders meeting, appoint ourselves to the board and as officers and then vote for and file for dissolution of the corporation? William, California

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Response: The first issue that comes to mind is whether or not your father's revocable trust owned the shares of stock in his architectural corporation (or the shares were subject to a transfer on death designation to the trust). How do you tell? Try and locate the share certificate and / or the corporate minute book. A trust only possesses those assets transferred to its ownership.

Let's assume there is no record of the shares being transferred to the trust during your father's life. The provisions of a pourover will can only be used to transfer property by opening up a probate estate and transferring assets via the probate process. Obviously, you wish to avoid this but this might not be possible. One suggestion is to call the general information number of the California Secretary of State's business entities office and tell them you have a legal question regarding the mechanics of dissolving a California corporation. In some states, the secretary of state's office will field questions of this nature. I'm not sure whether California does or not. It can't hurt to ask and see if they will route you to a staff attorney or paralegal who will at least attempt to answer the question. The secretary of state's office might have an internal policy of accepting articles of dissolution from the executor of the estate of a deceased sole shareholder (but I wouldn't bet on it).

As always, your best source of information is a local attorney experienced in California probate and corporate law.

p.s. If all your father's other assets are properly titled in the name of the trust and this is the last asset to deal with, you won't have to go through a full estate probate cycle to take care of dissolving the corporation to my knowledge. You would file in the California probate court for letter of administration formally making you the administrator of your father's estate. List the shares of the architectural corporation as the sole assets of the estate. Once that is accomplished, I believe you can vote the shares as executor. Next, sign a resolution appointing you sole director. Next, sign resolutions as sole shareholder and, also, as sole director approving dissolution of corporation. File the required documents with the secretary of state's office. Once completed, close the probate estate as it no longer possesses any assets. Again, local counsel can walk you through this process and prepare the necessary documents.