status of business under trust

[gracettajr]

My mother operated a retail business, "GJr" with her Social Security Number, as EIN, for tax reporting purposes.

The business was an asset placed in her trust.

Upon her death, since the business could no longer use her SSN for EIN tax reporting purposes, her children formed, "GJr, LLC" to continue to operate the business.

What is the status of the business?

Is "GJr, LLC" considered an asset in her trust, or a new independent LLC entity outside of the trust?

Does the executor of the trust retain any overriding control of the business in it's new form as an LLC?

 

[dee_dub]

There are three entities you need to distinguish here: the trust, the business (at one point, at least, an asset of the trust), and the LLC (which appears to have current operational control of the business). The business is not, strictly speaking, "in its new form as an LLC". It is separate from the LLC.

My question: How did the LLC obtain operational control of the business? Was the asset disposed of from the trust? If not (and I suspect not), it is still an asset of the trust and the executor retains control. The executor does NOT control the LLC; but the LLC has no claim to the business other than what the executor allows.

 

[gracettajr]

The LLC, which which was formed including all of the siblings under the trust, of which 2 are the trust executors, believed that in order to continue operations (report taxes, establish credit, etc) that a new EIN was required.

Also, it was felt that until estate issues were further clarified/monetized, that no other actions (such as moving it out of the trust) would be required, until distribution of the estate proceeds would occur.

The underlying problem, after 3.5 years, is that one of the trust executors (local to the estate assets and business) has consistently refused to move forward and dispose of the estate assets.

Concurrently this trust executor has continued to use estate assets for personal gain. In one minor ongoing instance an office space in the estate is utilized and not paid for.

In another this trust executor has utilized a credit card of the retail business, to run up debts in excess of $35,000, for expenditures that have nothing to do with the retail business. In fact, the expenditures are directly attributable to their own personal consulting business.

Is the executor allowed to use estate assets for personal gain?

Since there are two executors, do either of them have independent ability to sign contracts/leases, or are both signatures required to be valid obligations?

The language in the trust documents, regarding disposition, state that, "All of the remaining principal and any undistributed income of the Trust Estate, shall be distributed, free of trust, in equal shares, within three (3) months after the death of the Settlor, or as soon as practicable thereafter, to Settlor's children." Language also states that should the contents of the estate be disputed, directly or indirectly, that the contesting person's share shall be revoked.

How do any of the Settlor's children challenge the "3 months or practicable thereafter timeframe and not be revoked from the trust?