Ten months ago, we wrote about an unusual case involving an LLC member who documented two irreconcilable membership interest transfers upon death. In Harris v Harris, 2020 NY Slip Op 31570(U) [Sup Ct, NY County Apr. 23, 2020], the deceased LLC member, Steven, had a written operating agreement conveying a life estate of his membership interest to his wife and, upon her death, to their daughter (hereinafter “Family Number One”).
Symmetrically at odds with the operating agreement (which happened to be unsigned, some provisions internally inconsistent, and loaded from front to back with handwritten comments), the deceased LLC member left an executed last will and testament conveying a life estate of his membership interest to another woman (referred to in the will as his “loving partner”), and upon her death, to their alleged out-of-wedlock daughter (hereinafter “Family Number Two”).
Last week, in Harris v Harris, ___ AD3d ___, 2021 NY Slip Op 02105 [1st Dept Apr. 6, 2021], a Manhattan-based appeals court reversed the lower court’s decision in Harris, which denied both sides’ motions for summary judgment, and granted summary judgment to Family Number One. Harris is a fascinating take on two important legal issues for closely-held business owners. Continue Reading Unsigned, Non-Final Operating Agreement Trumps Conflicting Testamentary Bequest of LLC Interest