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S Corp & Testamentary Trust

Minority Shareholder died (coming up on 2 years) and the S Corp stock was put into a Testamentary Trust. The Trustee (daughter) will not act to avoid losing the S Election. The assets of the Trust are held for the benefit of the granddaugther at a future date. The Trustee will not agree to a buy-out. She thinks we are trying to pull one over on her. We stated that if the price of the buy out is too low, get an apprasial or she can buy the stock for herself at that price (she has the money). Basically, she will not act. Do you all know of other options so as to not blow the S Election?

Reply to
CGS
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Do your corporation laws allow a buy out or a minority interest against her wishes? Can another corporation be formed and assets sold to it? This may raise other issues, of course.

Reply to
Wallace

The daughter could put the stock into a Uniform Gifts to Minors Act trust. Or if the trust requires or even permits distribution to the granddaughter, it might be considered a grantor trust with respect to her.

The only other thing I can think of is a partition - force the whole company to be sold (the remaining shareholders could buy it if they are the highest bidder).

Reply to
Stuart A. Bronstein

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