A beautiful estate planning binder doesn’t mean your plan is complete, especially when business interests or stock grants are involved. In this Tuesday Triage episode, Jill Mastroianni unpacks a listener question about distributing a family business in a blended family and uses it to expose one of the most common estate-planning blind spots: assumptions about ownership. Through real-world examples and practical guidance, Jill walks listeners through how to identify who actually owns a business interest, what that ownership really means, and why these details matter long before a crisis forces the issue.
A beautiful estate planning binder doesn’t mean your plan is complete, especially when business interests or stock grants are involved. In this Tuesday Triage episode, Jill Mastroianni unpacks a listener question about distributing a family business in a blended family and uses it to expose one of the most common estate-planning blind spots: assumptions about ownership.
Through real-world examples and practical guidance, Jill walks listeners through how to identify who actually owns a business interest, what that ownership really means, and why these details matter long before a crisis forces the issue.
What You’ll Learn in This Episode
Why business interests and stock grants are often the weakest link in an otherwise solid estate plan
How a “perfect” estate planning binder can still be full of gaps
Why contributing money to a business does not automatically mean you own the business interest
How to use tax documents like Schedule K-1s and Form 1099-DIVs to identify ownership
The difference between pass-through entities and C corporations, and why that matters
How buy-sell agreements work in family businesses and how life insurance funds them
A practical starting point for gathering reliable business information using the Secretary of State’s records
Resources & Links
The Death Readiness Playbook. A practical system to help you translate documents into real-world readiness and fill in the gaps that estate plans often miss. https://www.deathreadiness.com/playbook
Tennessee Secretary of State – Business Entity Search. Use this link to look up entity details and historical filings): https://tncab.tnsos.gov/business-entity-search
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In today’s Tuesday Triage episode, I explain why business interests and stock grants are often the weakest link in an otherwise solid estate plan. Using a listener question and real-world examples, I break down what you need to know about ownership, documentation, and follow-through — before a crisis forces the issue.
Welcome to the Death Readiness Podcast. This is not your dad’s estate planning podcast. I’m Jill Mastroianni, former estate attorney, current realist, and your guide to wills, trusts, probate and the conversations no one wants to have. If your Google search history includes, “Do I need a trust?” “What exactly is probate?” and “Am I supposed to do something with mom’s Will?” you’re in the right place.
I spent this weekend deep-cleaning our old house to get it ready to rent. As part of that process, I peeled off the frosted window film we put up not long after we moved in.
The house has this big, beautiful front window. The previous owner had installed cordless blinds, and I was thrilled. Window treatments stress me out, so having something already there, and in perfect condition, felt like a small miracle.
And yet, I should have known better.
When I first got my dog Oliver — he passed away a couple of years ago — I brought all 80 pounds of him into a rental house and left him alone for maybe an hour. When I came back, every single blind in that house was destroyed. You don’t realize how many blinds you have until you have to replace every single one of them.
So when we moved into this house, we planned to leave the blinds raised whenever we left the dogs home alone. Planned being the key word.
The first time we left as a family, we forgot. And when we came home, we were greeted by three very excited dog heads — small, medium, and large — poking cheerfully through the blinds, thrilled to see us.
As we got out of the car, my daughter tried to make a joke about it. I responded, probably far too solemnly, “Too soon, April. Too soon.” I really loved those blinds.
We replaced them with frosted window film to keep the dogs from barking at everything they saw outside. That solution was about 99% ineffective.
So this weekend, as I scraped off that grimy, dog-smeared film, I pulled the blinds down one last time. And that’s when I saw it — gaps everywhere. Bent slats. Spaces that used to be covered but weren’t anymore.
And I thought: this is what a lot of estate plans look like.
Maybe you have a beautiful estate planning binder you received when everything was freshly signed. Maybe you felt the way I did about those perfect blinds — relieved, proud, done.
But then life happened. The plan didn’t keep up. And now it’s full of gaps, the kind that frustrate you, or even make you a little sad.
Maybe you added your own version of protective film — a workaround, an assumption, a “we’ll deal with it later.” But deep down, you know it’s not really fixing anything.
Because a perfect-looking estate planning binder doesn’t mean your plan is complete.
That’s why I created The Death Readiness Playbook. It helps translate legal documents into real-world readiness, so your plan keeps working even as life changes. You can find it at deathreadiness.com/playbook. That’s deathreadiness.com/playbook.
But today, together, we’re going to work on filling one of those gaps that so many estate plans have.
This episode was inspired by a question from Megan in Tennessee about how to distribute ownership in a family business. As I thought through her question, I realized it was time to drill down on something that’s often overlooked: what it actually means to own a business interest, or to think you own one.
And I’m not just talking about family businesses. If you or your partner have stock in the company you work for, stick around — because I’m talking about that, too.
When we talk about business interests or stock grants in the companies we work for, we tend to be surprisingly casual about them. During recruiting, someone might mention stock as part of your compensation package — almost as a perk, a signal that you’ve “made it.” And maybe you feel a little impressed with yourself for owning stock in the company you work for.
But what does that actually mean?
The first time I was ever granted stock was in the job I had before starting Death Readiness. As part of that grant, I signed a restricted stock agreement. That agreement spelled out things like the vesting schedule, and what would happen to the stock if I died or if my employment ended.
I didn’t die — but I was terminated.
Being terminated was awful, but it could have been much worse. I was incredibly relieved that I had kept my restricted stock agreement and the documentation of my stock grant with my personal records. Having those documents gave me some of my power back. I knew what I was owed and when I should receive it.
And I remember thinking how different, and how uncomfortable, it would have felt if I’d had to go back to the company that had just fired me and ask them for copies of those documents. Even imagining that makes me a little squeamish.
Fortunately, the company was required to buy my stock back. And the money from that repurchase? That’s what I used to start this company — Death Readiness.
I share that story because ownership interests often feel abstract right up until the moment they matter. And when they matter, the details matter a lot.
Let’s get back to today’s question from Megan in Tennessee.
Megan and her husband have three children together, and her husband has two children from a prior marriage. Like many blended families, Megan reached out because she wants to understand how to fairly distribute their assets among all five children — and one of the biggest question marks is a business interest.
So let’s focus on the business interest.
I’ll call Megan’s husband Michael.
Megan told me that Michael is part of a family business, and that she and Michael paid off a loan to purchase their share of that business. That sounds straightforward but it immediately raises a much more basic question.
Who actually owns it?
Whenever my daughter asks if she can do something, I make her answer the four Ws:
Who are you going with?
What are you doing?
When are you going?
And where are you going?
I use a similar framework in estate planning because it forces clarity where assumptions tend to live.
So let’s walk through 3 Ws here: Who, What, When
Who owns it?
What exactly is it?
When did you get it?
We’ll start with the first one: Who owns this business interest?
Does Megan own it? Does Michael own it? Or do Megan and Michael own it jointly?
And here’s the key point: even if Megan contributed money, or even most of the money, to buy the interest, that does not automatically mean she owns it.
So how do Megan and Michael figure that out?
The first place to look is your tax documents, because they’re usually the easiest thing to get your hands on.
Do Megan and Michael receive an IRS Schedule K-1 from the family business? A Schedule K-1 reports income and losses from certain types of businesses known as pass-through entities.
In a pass-through entity, the business itself does not pay federal income tax. Instead, profits and losses pass directly through to the owners. These entities are extremely common. In fact, Death Readiness itself is a pass-through entity — it’s a limited liability company, or LLC, registered in the state of Michigan.
Other common pass-through entities include partnerships and S corporations. There are two main categories of corporations — S corporations and C corporations — and we’ll talk about C corporations a little later in this episode.
If you receive a Schedule K-1, turn to Part II: Information About the Partner. The person listed as the “partner” is the owner — even if they don’t think of themselves as a partner.
In Part E, you’ll see a Social Security number. Ask yourself: whose number is it — Megan’s or Michael’s?
Then look at Part F, which lists the name and address of the partner. Whose name appears there?
That’s your first real clue as to who the business itself recognizes as the owner.
Now, if the family business is structured as a C-corporation, ownership shows up a little differently. I’m not going to do a deep dive here into the differences between C-corporations and pass-through entities. But, here’s a surface overview. A pass-through entity, like a limited liability company, a partnership, or an S-corporation, does not pay federal income tax. Instead, profits and losses pass directly through to the owners on their individual income tax returns.
A C corporation is taxed under a system often referred to as “double taxation.”A C corporation, unlike a pass-through entity, is a separate taxpaying entity. A C-corporation does pay federal income tax. Then, when the corporation distributes profits to shareholders, usually as dividends, those shareholders pay income tax again on the same money on their individual income tax returns.
Shareholder distributions are reported on Form 1099-DIV.
In the middle of that form, you’ll see a box labeled “recipient’s TIN.” The recipient is the shareholder — the owner of the interest — and T-I-N stands for tax identification number, usually a social security number. Whose number is listed? Megan’s or Michael’s?
Under that you’ll see the recipient’s name. That’s the shareholder’s name. Again — whose name is it?
Now, a quick but important caveat: what the Schedule K-1 or Form 1099-DIV say is not legally dispositive. The actual business agreements control ownership. But these tax forms are a very helpful place to start because they’re documents you probably already have, rather than something you need to request from the company.
Once you’ve done that initial homework, it’s time to go deeper into the Who.
Depending on the business, ownership may be documented across several different agreements — an operating agreement, a stock agreement, a buy-sell agreement, an assignment of interest, or a purchase agreement.
What you’re looking for is the agreement, or combination of agreements, that officially establishes who owns the interest according to the company’s own records.
Now, these documents are not public.
But stay with me, because in a moment I’ll show you what is available publicly, how to access it, and how to use that information to ask smarter, more targeted questions about the documents you actually need.
Once you’re clear on Who owns it, then you can move on to the next question: What exactly do you own?
Not all ownership interests are created equal.
For example, is your interest voting or non-voting? Some owners have a right to share in profits and losses but have no say in how the business is run. That distinction matters — a lot — especially in family businesses.
Next, ask: what happens to the interest if you die or if your employment ends?
If you’re an employee with a relatively small ownership stake, the company will often have the right — or the obligation — to buy your interest back. And if you acquired the interest through work, you almost certainly signed more than one document. You may have an operating agreement, a stock agreement, or a grant agreement. And if you only have the signature page, that’s not enough — you need the entire document.
One of those agreements should spell out things like the vesting schedule, and it may also address what happens if you’re terminated or if you die.
And here’s where people are often surprised: there may be restrictions on who can inherit the interest. Your spouse may not be allowed to receive it. You may be prohibited from transferring it at all. And the answer is very often not what people assume it is.
One important warning: don’t rely on HR to answer these questions. HR doesn’t work for you — they work for the company. And HR is not an attorney. Even well-meaning answers can be incomplete or wrong when it comes to interpreting legal agreements.
The right person to answer these questions is an attorney who represents you.
Now, if the ownership interest is more substantial — like a significant stake in a family business — the analysis shifts.
In those cases, the business may not realistically be able to buy the interest from your estate in the ordinary course of business. And in family-owned companies, the family often prefers that outcome anyway. They typically do not want a surviving spouse or outsider stepping into ownership.
That’s why many family businesses use buy-sell agreements, and they’re often funded with life insurance.
Here’s how that works in plain English. The buy-sell agreement is a written contract that says what happens to an owner’s interest if that owner dies. Instead of the ownership interest passing to a surviving spouse or children, who may not be involved in the business, the agreement requires the business itself, or the remaining owners, to buy the deceased owner’s business interest.
Life insurance provides the money to make that purchase possible.
The business or the other owners take out a life insurance policy on each owner. When an owner dies, the life insurance pays out cash. That cash is then used to buy the deceased owner’s interest from their estate. The family gets liquidity, and the business keeps ownership within the existing group.
But — and this is critical — this only works if there is an actual written buy-sell agreement and the life insurance is properly owned and in force. If either piece is missing, the plan doesn’t work.
Okay. So far, we’ve covered who owns it and what it is. Now let’s move on to the next question: when.
When did you acquire the interest, and how much did you pay for it?
That matters because of tax basis. If you sell the interest — or if the company repurchases it — the gain you report is the difference between what you paid for it and what you received when it was sold. If you don’t have records showing when you acquired the interest and what you paid, you’re guessing. And guessing on taxes is never a good idea.
Now, what if you received the interest as part of your compensation?
In that case, there’s another question you need to ask yourself: did you make an 83(b) election?
The term “83(b) election” references the applicable provision in the Internal Revenue Code that allows an employee who receives restricted stock to choose, within a very short window, to report the value of the stock as income at the time it’s granted, even though it hasn’t vested yet.
When does the election need to be made? It must be made within 30 days of the stock grant. Not 31. Not “when you get around to it.” Thirty days. If you miss that window, you lose the option entirely.
That single piece of paper can have enormous tax consequences, so if you filed it, keep a copy. And keep a record of when it was filed- proof that it was filed within that 30-day window.
Business interests are often a time bomb waiting to go off.
The documents are dense. They’re full of words that feel deliberately confusing. And because of that, it’s tempting to gloss over the details.
But if it’s something you own, you need to understand what that ownership actually means — not just that your boss once said you’d make a lot of money someday because you have it. And even in a family business, don’t rely on vague assurances that your spouse or children will be “taken care of.”
What does taken care of mean? Because it doesn’t mean the same thing to everyone.
You need to know the details of what you own. It really is that simple.
So where do you start?
I would start with the Secretary of State, or whatever the equivalent is in the state where the business operates.
Now, you could start by asking the business directly for information. But before I make a request like that, I like to do a little homework. I want to understand what I’m asking for and who I should be asking. This is exactly how I approach things with clients.
If a client told me they owned an interest in a Tennessee business, the very first thing I’d ask for was the name of the entity. Then I’d go straight to the Secretary of State’s website.
For Megan and Michael, they live in Tennessee, so let’s assume the family business operates in Tennessee as well.
I would start with the Tennessee Secretary of State’s business entity search. I’ll include the link in the show notes.
You enter the name of the business. And if you’re not sure of the full legal name, that’s okay. Just type in the part of the name you know. When I ran a sample search preparing for this episode, I typed in the word “chocolate,” and it returned a whole list of businesses with “chocolate” in the name.
Click on the entity name.
Right away, you’ll see basic but important information, like the type of entity. And when I say type, I mean: is it an LLC, a limited partnership, a corporation?
You’ll also see when the company was formed, the principal office address, the mailing address, and the registered agent. A registered agent is the person with a physical Tennessee address who is legally responsible for receiving legal documents and official state notices on behalf of the business.
But my favorite part is the list of the company’s historical filings.
These are the documents the business was required to file with the Secretary of State. It’s not everything — you won’t find buy-sell agreements or stock grant agreements here — but it’s an excellent starting point. It helps you confirm the entity, understand its structure, and see how it’s evolved over time.
And the best part? In Tennessee, you can usually access all of it for about twenty dollars.
That’s a small price to pay for some clarity.
So here’s the takeaway I want to leave you with.
Business interests don’t usually blow up because someone made a reckless decision. They cause problems because of assumptions — assumptions about ownership, about value, about what will happen “when the time comes.”
And as you’ve heard today, the time comes in a lot of different ways. A death. A termination. A family transition.
The work you do now — figuring out who owns what, what it actually means, and when it was acquired is what keeps those moments from turning into crises.
This is how you replace gaps with clarity.
If today’s episode made you realize there’s information you don’t fully understand or documents you wouldn’t know how to find, that’s not a failure. It’s an invitation to get more intentional.
And that’s really what death readiness is about.
Because good planning isn’t about predicting every outcome. It’s about making sure the people you love aren’t left guessing when it matters most.
I designed The Death Readiness Playbook to help you fill in these gaps, one decision at a time. You can learn more and get your copy at deathreadiness.com/playbook. That’s deathreadiness.com/playbook.
Thanks for listening today.
This is Death Readiness, real, messy and yours to own. I’m Jill Mastroianni and I’m here to help you sort through it, especially when you don’t know where to start.
Hi, I'm April, Jill's daughter. Thanks for listening to The Death Readiness Podcast. While my mom is an attorney, she’s not your attorney.The Death Readiness Podcast is for educational and entertainment purposes only. It does not provide legal advice. For legal guidance tailored to your unique situation, consult with a licensed attorney in your state. To learn more about the services my mom offers, visit DeathReadiness.com.