How to Distinguish Estate Assets from Corporate Assets in Kansas

Detailed Answer

In Kansas, the estate of a deceased person and a corporation established by a relative are separate legal entities. Estate assets pass to heirs or beneficiaries through probate. Corporate assets remain with the corporation unless formally transferred. Understanding this division helps avoid confusion and potential disputes.

1. Identify the Owner of Record
Review deeds, titles, account statements and contracts. Estate assets will be titled in the decedent’s name or as “estate of [Name].” Corporate assets will be titled in the corporation’s name and bear its tax ID number.

2. Examine Probate Filings
Under the Kansas Probate Code, the personal representative must file an inventory of estate assets with the court. See K.S.A. 59-508 for inventory requirements (K.S.A. 59-508). Any asset listed here belongs to the estate.

3. Review Corporate Records
Kansas corporations file articles of incorporation and annual reports under the Kansas General Corporation Code. Corporate minutes, bank statements and tax returns will confirm which assets the corporation owns. See definitions at K.S.A. 17-6002 for corporate assets.

4. Trace Funding Sources
Examine where funds originated. If a relative used their personal funds to purchase an asset but titled it in the corporation’s name, it remains corporate property absent a formal transfer to the estate.

5. Formal Transfers
To move corporate assets into an estate, the corporation must transfer title via board resolution or sale. Personal representatives cannot treat corporate property as estate property without following corporate procedures.

6. Understand Fiduciary Duties
Personal representatives owe duties to estate beneficiaries. Officers and directors owe duties to corporate shareholders. Mixing assets may breach these separate duties.

Helpful Hints

• Collect all titles, deeds and bank statements before probate.
• Check for corporate resolutions authorizing asset sales or transfers.
• Use the decedent’s Tax Identification Number (TIN) vs. the corporation’s Employer Identification Number (EIN) to distinguish accounts.
• Keep clear records of any gifts or loans between the estate and the corporation.
• Consult an attorney if you suspect assets have been commingled.
• Document any board approvals before transferring corporate property.