BUSINESS OWNER ALERT: LIMITED LIABILITY COMPANY LAW CHANGES COMING IN 2023

SB Law • October 15, 2022

By:  Attorney Samuel J. Spurney

In April of 2022, Governor Tony Evers signed into law 2021 Wisconsin Act 258, introducing significant changes to the law governing Wisconsin limited liability companies (LLCs). On January 1, 2023, the Revised Uniform Limited Liability Company Act will govern Wisconsin LLCs (WULLCL).

How Does This Change Affect My Current LLC?

For currently formed Wisconsin LLCs or LLCs created on or before December 31, 2022, you have three options:

1) File a Statement of Nonapplicability with the Wisconsin Department of Financial Institutions (WDFI) by December 31, 2022. Such Statement of Nonapplicability is an election that will allow your LLC to continue to be governed by the current version of Chapter 183 and your LLC will not be subject to the WULLCL as of January 1, 2023;

2) File a Statement of Applicability, which is an election allowing you to “opt in” and be subject to the WULLCL prior to January 1, 2023; or

3) Take no action.  Taking no action will mean that on January 1, 2023, your LLC will be automatically opted in and governed by WULLCL.

How Does This Change Affect any LLCs I form on or after January 1, 2023?

All Wisconsin LLCs formed on or after January 1, 2023 will be governed by the WULLCL.  There is no ability to file a Statement of Nonapplicability on or after January 1, 2023.  Note that if an LLC files a statement of Nonapplicability on or before December 31, 2022, such LLC can choose to opt into being governed by the WULLCL at a later date.

How do I file a Statement of Nonapplicability /Statement of Applicability?

The WDFI website is the place to make such elections, and links to each form can be found here:

What Are Suggested Next Steps?

If you file a statement of Applicability and elect for your LLC to be governed by WULLCL or if you intend to take no action and be subject to the WULLCL starting on January 1, 2023, it is crucial that you review your operating agreement to determine if there are any provisions that will be affected or nullified by the WULLCL.

LLCs that timely file a Statement of Nonapplicability and choose to opt out of governance under the WULLCL likely do not need to review or make changes to their current operating agreement, however, it is crucial that a  Statement of Nonapplicability is timely submitted to and filed by the WDFI by December 31, 2022.

If you have questions or would like to discuss the effect of the LLC law change on your business, please do not hesitate to contact Steimle Birschbach, LLC.  We would be honored to represent you and your business.  Straight Talk. Solid Advice.  That’s our way of doing business.

This blog post is provided for informational purposes only and by its very nature is very general.  This information is not intended as legal advice.

 

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Satisfying Bequests in a Will While Avoiding Probate

By SB Law • 15 May, 2023
By: Attorney Thomas Griesbach Beneficiary designations (or sometimes called TOD [Transfer on Death] or POD [Payable on Death] designations) may be placed on almost any financial asset. A Non-Probate Transfer at Death Deed (“TOD Deed”) may be used to transfer Wisconsin real estate without court to whomever the grantor names in the TOD Deed. If a Decedent designates beneficiaries on all but fifty thousand dollars’ worth of his or her property, the Decedent will have avoided probate. While this strategy is not appropriate in all situations, it is often a simple and cost-effective way to avoid probate. But such a strategy may lead to unintended circumstances if the Decedent includes general bequests in his or her Will. A Will only governs probate property (i.e., a Decedent’s property that has no beneficiary designation and no surviving joint owner). Therefore, if a Decedent designates beneficiaries on nearly all his or her assets, there may be insufficient funds governed by the Will to satisfy the bequests made therein. Consider the following as an example. Grandma Betty has three adult children who are on good terms and get along. Betty wants to leave a sum of two thousand dollars to each of her ten grandchildren with the residue of her estate equally among her three children. Betty executes a Will accordingly and then proceeds to designate her children as beneficiaries of all her financial accounts. Upon Betty’s death, she owns tangible personal property of de minimums value and has no car or real estate. Her remaining wealth is contained in her financial accounts which pass directly to her children pursuant to the beneficiary designations. Consequently, there is no property governed by her Will and her grandchildren get nothing. There are numerous work arounds to avoid this unintended result, as discussion of which is beyond the scope of this blog. Simply know that your beneficiary designations must be properly correlated with your Will. If you are not confident in this, now is the best time to review the same. This blog post is provided for informational purposes only and by its very nature is general. This information is not intended as legal advice and should not be relied upon.
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