- Ag Docket
The decedent's estate plan included a pour-over will and a trust. The terms of the trust specified that the decedent's assets would be divided equally amongst her children, except that a son had an option to buy the decedent's 95 shares of stock in a closely-held company. At the time of death, the decedent's stock was subject to a shareholder's agreement requiring the company to buy the decedent's stock upon the decedent's death unless the stock passed to the decedent's "immediate family" (defined as children, spouse, parents or siblings of the decedent). By virtue of the decedent's will, the decedent's stock passed to her revocable trust which included a son-in-law of the decedent as a co-trustee. Because a trustee has legal title to trust assets, the court reasoned that the corporate shareholder agreement barred the transfer of stock to the trust due to the son-in-law serving as a co-trustee. The court reached this conclusion even though all beneficiaries of the trust were immediate family members. Thus, the option for the son to buy the corporate stock was ineffective. The court remanded the case to the trial court (which had held that the shareholder agreement did not control the disposition of the stock) to determine if the parties, in accordance with the shareholder agreement, could reach an agreement with respect to the purchase of the shares. If the parties cannot reach such an agreement, the court directed the trial court to order the shares be sold to the corporation. Jimenez v. Corr, 764 S.E.2d 115 (Va. 2014).
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