Why a Georgia LLC Does Not Avoid Probate Automatically
Georgia LLC law governs what happens to an LLC as an entity — not what happens to the ownership interest when the member dies. The LLC itself continues to exist after an owner’s death. What changes is who holds the membership interest, and under what authority.
Under O.C.G.A. § 14-11-503, a membership interest that passes at death becomes an assignee interest by default — the heir receives the economic value (distributions, liquidation proceeds) but has no right to vote, manage, or access company records unless the operating agreement says otherwise and unless they are admitted as a full member by the remaining members. For single-member LLCs, this means the business sits in legal limbo during probate with no one holding management authority.
Probate in Georgia takes 9 to 18 months for straightforward estates. During that time, no one has clear authority to sign new contracts, renew leases, make payroll decisions, or sell business assets. The personal representative of the estate can act for the estate — but the estate holds an assignee interest, not a management position. The gap between “inheriting the economic value” and “having the authority to run the business” is where businesses lose value or fail entirely during probate.
The Best Way: Revocable Trust Plus LLC Retitling
A revocable living trust avoids probate for any asset titled in the trust’s name. At death, the successor trustee steps in immediately — no court order required, no waiting period. For a business owner, this means the successor trustee can act for the LLC interest on the day after death, not 12 months later.
But the trust only controls what is actually titled in the trust. This is where most business owners miss the second step. They create the trust, sign the documents, and assume the business is protected. It is not — until the LLC interest is formally retitled into the trust. Retitling means amending the operating agreement (or executing a separate assignment of membership interest) so that the member entry reads “John Smith, Trustee of the John Smith Revocable Trust” instead of “John Smith” individually.
Without retitling, the trust owns nothing. The individual still holds the LLC interest. At death, it goes through probate exactly as if no trust existed. The retitling step is a one-page document — but it must be done for the trust to do anything.
After retitling, the operating agreement must also authorize the successor trustee to act as a full member with management authority. If the operating agreement requires a member vote to admit a new manager, and the only member is now a trust whose trustee has died, there is no one left to vote. The operating agreement must include language that automatically grants the successor trustee full membership authority without requiring a vote.
Why a Will Alone Does Not Protect a Georgia Business From Probate
A will is a probate document. It controls what happens to your assets after the probate court processes your estate — not before. Using a will to leave your LLC interest to a family member means: the family member inherits the interest, but only after probate concludes, and only after the court issues letters testamentary authorizing the personal representative to act. During the probate period, the family member has no legal authority over the business.
A pour-over will — the type used alongside a revocable trust — does something slightly different: it captures any assets that were not titled in the trust and pours them into the trust at death. But even a pour-over will goes through probate for the assets it captures. The goal is to have as little as possible pass through the pour-over will. The LLC interest should be retitled into the trust before death so that it never touches probate at all.
What the Operating Agreement Must Say
A trust that holds the LLC interest without a properly updated operating agreement creates a different kind of problem. Georgia LLC law defaults to assignee status for any transferred interest. If the operating agreement does not specifically authorize the trust (and the successor trustee) to hold full membership rights, the trust may only hold an assignee interest — economic value, no management authority — even after retitling.
The operating agreement must address three things for probate protection to work:
Authorized trust ownership. The agreement should explicitly state that membership interests may be held by a revocable living trust and that the trustee of such a trust holds full membership rights, including management authority and voting rights.
Successor trustee authority. When the original trustee dies and the successor trustee steps in, the operating agreement must recognize the successor trustee as a full member with the same authority. Without this provision, the successor trustee may hold the interest but face challenges to their management authority from creditors, banks, or co-owners.
No vote required for admission. Standard operating agreements often require a unanimous member vote to admit a new manager. If the sole member’s trust transitions to a successor trustee, there is no one left to vote. The agreement must waive this requirement for trust-held interests or specifically provide for automatic admission of the successor trustee.
For a complete breakdown of what the operating agreement must include, see How Does an LLC Operating Agreement Protect a Georgia Business Owner.
Other Probate Avoidance Options and Why They Fall Short for Business Owners
Joint ownership. Adding a co-owner to the LLC avoids probate for the survivor — but it also gives that person current management authority and ownership rights. Joint ownership is not a succession mechanism; it is a structural change that creates co-ownership today, with all the complications that brings.
Transfer-on-death (TOD) designation. Georgia enacted the Uniform Real Property Transfer on Death Act in July 2024, which allows TOD deeds for real estate. There is no equivalent TOD mechanism for LLC membership interests under current Georgia law. You cannot add a TOD beneficiary designation to an LLC interest the way you can with a bank account or brokerage.
Beneficiary designation. LLC membership interests are not beneficiary-designated assets. You cannot name a beneficiary on your LLC interest the way you can with a life insurance policy or IRA. The interest passes through your estate (probate) or through your trust (no probate) — those are the only two paths.
S-Corp shares. If you own an S-Corp rather than an LLC, the same trust-plus-retitling approach applies — but with an additional requirement. Under IRC § 1361, S-Corp shares can only be held by specific trust types. A standard revocable trust qualifies during the grantor’s lifetime, but after death the trust must either qualify as an Electing Small Business Trust (ESBT) or a Qualified Subchapter S Trust (QSST) within two months and sixteen days of death, or the S-Corp election terminates. This requires specific language in the trust document and coordination with the estate planning attorney before death — not after.
How to Protect Your Georgia Business From Probate
1
Create a revocable living trust
Work with a Georgia estate planning attorney to draft a revocable trust that names a successor trustee and specifies what happens to the trust assets at your death or incapacity. The trust should explicitly authorize holding LLC membership interests and grant the successor trustee full management authority over those interests.
2
Retitle the LLC interest into the trust
Execute an assignment of membership interest transferring the LLC interest from you individually to you as trustee of your revocable trust. Update the operating agreement to reflect the trust as the current member. Confirm the member entry reads “[Name], Trustee of the [Name] Revocable Trust” — not your individual name.
3
Update the operating agreement succession provisions
Amend the operating agreement to authorize trust ownership, grant the successor trustee full membership rights, and eliminate any vote requirement for admission of the successor trustee. For multi-member LLCs, add buy-sell provisions if they do not already exist.
4
Add a pour-over will as a backup
A pour-over will captures any assets not titled in the trust at death and directs them into the trust. It still goes through probate for those assets — but it ensures nothing is left behind that the trust does not cover. The goal is to have as little as possible pass through the pour-over will.
5
Review every three years
Confirm the LLC interest is still titled in the trust, the operating agreement still reflects current ownership, and the successor trustee designation is still accurate. If the business value has changed significantly, coordinate with your CPA on whether the estate tax exemption threshold is relevant to your plan.
