Problem 1 — Your Business Interest Goes Through Probate
A will must be filed with the Georgia probate court before any transfer occurs. The probate court’s authority must be invoked at death — no transfer to the beneficiaries happens before the court process concludes.
For a Georgia business owner, this means the LLC membership interest sits inside the estate while the court works through the administration process. The LLC entity itself does not go through probate, but the ownership interest does. That interest cannot be transferred to your family until the court authorizes it.
The average Georgia probate timeline for a business estate is 12 to 18 months. Complex or contested estates take longer, often 18 months to several years. For a detailed phase-by-phase breakdown of every stage, see How Long Does a Georgia Business Go Through Probate.
Problem 2 — Heirs Get Assignee Rights, Not Management Rights
This is the problem most Georgia business owners do not know about until it is too late.
Under O.C.G.A. § 14-11-506, when a Georgia LLC member dies, the estate’s legal representative steps into the deceased member’s position as an assignee only. An assignee receives economic rights: distributions, profit allocations, and sale proceeds. An assignee does not receive management authority, voting rights, or the ability to participate in running the business.
For the estate to gain full membership rights — including management authority — the operating agreement must specifically allow it, or all remaining members must unanimously consent. Neither happens automatically.
This means the family can receive the business’s cash distributions during probate. They cannot vote, sign contracts, hire employees, or make operational decisions on behalf of the deceased member’s interest.
Problem 3 — No One Has Clear Authority to Run the Business
The assignee-only rule creates a governance gap during the probate period for multi-member LLCs. The remaining members manage the business, but they manage it without the deceased member’s voice, vote, or operational input.
If the deceased member was the managing member, the business may have no one with the legal authority to fulfill those functions through the deceased’s ownership interest. The executor can petition the court for expanded powers to continue operations, but that requires a separate court proceeding, adds time and cost, and the outcome depends on the court. It is not guaranteed.
For a full picture of what this costs the business, see How Much Does It Cost if a Georgia Business Goes Through Probate.
Problem 4 — Your Will Becomes Public Record
When a will is filed with the Georgia probate court, it becomes a public document. Anyone can request to view it or obtain a copy.
For a business owner, that exposure can reveal details you spent years keeping private: what the business is worth, who gets what share, the ownership structure of any entities referenced in the will, and the identities of every beneficiary.
A revocable living trust does not go through probate and is not filed with any court. Trust documents remain private.
Problem 5 — Executor Commissions Apply to Every Liquid Dollar
Under O.C.G.A. § 53-6-60, the executor of a Georgia estate is entitled to 2.5% of all funds received into the estate plus 2.5% of all funds paid out. On a $200,000 liquid estate disbursed to heirs, the executor commission is $10,000 — before attorney fees, court costs, or business valuation expenses.
A dollar that flows through the estate and out to beneficiaries generates a combined 5% commission. Administration costs — including executor commissions and attorney fees — are paid before unsecured creditors and before beneficiaries receive anything.
Problem 6 — The Creditor Notice Window Extends the Timeline
Under O.C.G.A. § 53-7-41, every Georgia personal representative must publish a creditor notice in the county’s official newspaper once per week for four consecutive weeks, within 60 days of qualifying. This notice period is a statutory minimum — the estate cannot close before it completes.
The creditor notice process is mandatory regardless of whether the deceased had any outstanding debts. It cannot be waived or shortened. This alone adds months to the minimum probate timeline before any transfer can occur.
The Sole-Member LLC Exception
The assignee-only rule under O.C.G.A. § 14-11-506 applies to multi-member LLCs. For single-member LLCs, Georgia law was amended in 2009, and the estate representative receives full member status automatically — not just assignee rights.
Single-member LLC owners still face the 12 to 18 month probate timeline, public record exposure, and executor commissions. The assignee problem does not apply to them.
If you own a single-member LLC and your heirs do not want to run the business, the estate still goes through probate before the interest can be transferred to a buyer or distributed to beneficiaries.
The Alternative — A Funded Revocable Living Trust
Transferring a Georgia LLC membership interest into a revocable living trust during the owner’s lifetime removes the interest from probate entirely. When the owner dies, the successor trustee takes control without any court involvement.
The trust bypasses probate because the membership interest is owned by the trust, not by the individual. There is no estate to administer for that asset. The successor trustee follows the trust document and transfers the interest to the named beneficiaries in days, not months.
For the trust to work, it must be funded during the owner’s lifetime — the LLC membership interest must be retitled in the name of the trustee. An unfunded trust provides no probate protection.
For multi-member LLCs, the operating agreement must also be updated to grant the successor trustee management authority. Without that amendment, the trust inherits the same assignee-only problem.
For a side-by-side breakdown of every difference, see Revocable Trust vs. Will for a Georgia Business Owner.
The Three Documents a Georgia Business Owner Needs
A will alone does not solve the succession problem. Three documents, coordinated with each other, do. For a complete picture of what can go wrong even with a partial plan, see Problems With Business Succession Plans in Georgia.
1
A Funded Revocable Living Trust
The trust holds the LLC membership interest. At death, the successor trustee transfers the interest without court involvement. The trust must be funded — the membership interest retitled to the trustee — during the owner’s lifetime. An unfunded trust does not avoid probate.
2
An Updated Operating Agreement
The operating agreement must name the successor trustee as the authorized manager, or include a provision allowing a trust to be admitted as a full member without unanimous consent of remaining members. Without this amendment, the trust owns only an assignee interest — the same limitation a will produces.
3
A Funded Buy-Sell Agreement (Multi-Member LLCs)
If there are other owners, a buy-sell agreement determines what happens to the membership interest when a triggering event occurs. Without it, the remaining owners and the estate are left negotiating a buyout at the worst possible time.
For a full overview of how Georgia business owners structure a complete plan, see Best Estate Planning for Business Owners in Georgia.
