The LLC Survives — Your Ownership Interest Does Not Avoid Probate
There is an important distinction Georgia law draws that most business owners miss. The LLC itself is a legal entity. When you die, the entity continues. Contracts stay in place. Bank accounts remain open. The business does not dissolve just because you died.
But your membership interest — the ownership stake you hold — is personal property. It belongs to you individually. When you die, that interest becomes part of your estate and goes through the Georgia probate process before anyone can legally claim it, sell it, or manage it on your behalf.
The LLC keeps running. The ownership is frozen.
What Georgia Law Says When There Is No Plan
Under O.C.G.A. § 14-11-506, the default rule in Georgia is this: when a member dies, their estate’s legal representative steps into the deceased member’s position as an assignee only.
An assignee gets the economic rights tied to the membership interest — the right to receive distributions, profit allocations, and proceeds if the business is sold. That is it.
An assignee does not get management rights. Under O.C.G.A. § 14-11-502, an assignment of an LLC membership interest does not automatically confer the right to vote, participate in management, or make decisions on behalf of the LLC. The person who inherits your LLC ownership has no seat at the table.
And none of this happens quickly. Before the estate’s legal representative can act at all, a probate court must appoint an administrator — a process that takes time, costs money, and is entirely public. For a business owner with a complex estate, that process runs 18 to 30 months and costs an average of $27,300 in court and attorney fees.
Single-Member LLC — What Your Family Faces
If you own a single-member LLC in Georgia, your death creates an immediate operational problem. There are no surviving members to manage the business. Until probate appoints an administrator, no one has clear legal authority to sign contracts, access business accounts, make payroll, or make binding decisions.
Employees, vendors, and clients face uncertainty. Contracts may lapse. Opportunities get missed. Your family watches a business you spent years building sit in legal limbo while the court process runs its course.
The longer the gap, the more value the business loses.
Multi-Member LLC — What Your Partners Face
If you own a multi-member LLC, the surviving members retain management authority over the business while your estate goes through probate. That part can continue. But the question of what happens to your ownership interest creates its own complications — for a complete overview, see what happens to a Georgia business when the owner dies.
Your heirs become assignees of your economic interest — they receive distributions and allocations — but they do not automatically become members. Under O.C.G.A. § 14-11-505, admitting a new member requires the consent of existing members unless the operating agreement says otherwise.
This creates a situation your business partners did not plan for: they are now in business with your estate. Your spouse, children, or other heirs receive your economic rights but have no say in how the business is run. The surviving members continue making decisions. Your family has no input on those decisions even as they are entitled to the financial results of them.
This arrangement can last for months or years while probate resolves.
The Operating Agreement Is the Primary Control Document
O.C.G.A. § 14-11-506 is what Georgia law does by default. But the statute explicitly defers to the operating agreement. Your operating agreement can override these default rules entirely.
A well-drafted operating agreement addresses succession directly. The three most common provisions are:
Buy-sell provisions. Defines what happens to a deceased member’s interest. Establishes a valuation method and gives surviving members or the LLC entity itself the right to purchase the interest at a defined price. This keeps the business in the hands of people who are actually running it.
Right of first refusal (ROFR). Requires that before the estate can transfer the interest to heirs or third parties, surviving members must be offered the chance to buy it first. Prevents an outside party from becoming an involuntary co-owner.
Automatic transfer or succession provisions. Names a specific person — a spouse, business partner, or key employee — who steps into the deceased member’s full membership rights at death, without the need for probate or member consent. This is the cleanest outcome.
If your operating agreement does not have any of these provisions, the default rules govern. That means courts and co-owners — not you — decide what happens to the business you built.
Most operating agreements formed through LegalZoom, online templates, or general-practice attorneys do not include succession provisions. If you have not had an estate planning attorney review your operating agreement in the context of your succession plan, assume the gap is there.
How a Revocable Trust Solves the Probate Problem
The cleanest way to keep your LLC ownership interest out of probate is to transfer it into a revocable living trust before you die.
When your LLC membership interest is held by a trust, it is no longer a probate asset. At your death, your successor trustee transfers the interest to your beneficiaries without any court involvement, without an 18-month delay, and without public exposure of your estate.
The mechanics are straightforward for a single-member LLC: you amend the operating agreement to reflect the trust as the member, and you sign an assignment transferring your interest to the trust.
For a multi-member LLC, it is slightly more involved. Under O.C.G.A. § 14-11-505, the default rule requires unanimous consent of existing members to admit a new member — meaning your business partners may need to consent to the trust being named as a member. A well-drafted operating agreement will address this ahead of time.
The trust does not affect how the LLC operates during your lifetime. You continue managing the business exactly as you do today. The difference only matters when you die or become incapacitated — and at that point, the difference is everything.
The Two-Part Solution for Georgia LLC Owners
Fixing this problem takes two steps. Most owners need both.
1
Update your operating agreement
Add succession provisions that address what happens to your membership interest at death — buy-sell terms, right of first refusal, automatic transfer to a named successor, or explicit consent for a trust to hold the interest. This controls what happens inside the LLC at the business level.
2
Transfer your interest into a revocable trust
Once the operating agreement is updated to allow it, transfer your LLC membership interest into your revocable living trust. This removes the interest from your probate estate entirely. Your successor trustee distributes it to your beneficiaries at your death without court involvement.
These two steps work together. The operating agreement controls what happens at the business level. The trust controls what happens at the estate level. Together, they ensure that your family gets the business — quickly, privately, and without a probate judge in the middle.
A business succession plan addresses both. So does a complete estate plan for a business owner, which also covers your power of attorney and what happens if you become incapacitated rather than dying. For multi-member LLCs, a formal buy-sell agreement reviewed by an estate planning attorney handles the partner-side mechanics alongside the trust and operating agreement updates.
Frequently Asked Questions
Does a Georgia LLC automatically dissolve when the owner dies?
No. The LLC continues as a legal entity after the owner’s death. The membership interest — the ownership stake — passes through the estate, but the LLC itself does not dissolve unless the operating agreement or Georgia law triggers dissolution based on a specific event.
Can my spouse automatically take over my LLC when I die in Georgia?
Not without planning. Your spouse may inherit your membership interest through probate or through your will, but inheritance does not automatically confer management rights. Under O.C.G.A. § 14-11-506, the estate’s representative becomes an assignee with economic rights only — not a full member with management authority — unless the operating agreement says otherwise.
What is the difference between an LLC assignee and an LLC member in Georgia?
A member has ownership rights, voting rights, and management authority. An assignee receives only the economic rights attached to the membership interest — distributions and profit allocations — with no right to participate in management or vote on business decisions. This is the default position your heirs inherit under O.C.G.A. § 14-11-502 and § 14-11-506 without additional planning.
Does my operating agreement protect my family if I die?
Only if it contains succession provisions. A standard operating agreement that was drafted to cover day-to-day operations typically does not address what happens at the owner’s death. If yours does not have explicit buy-sell provisions, right of first refusal clauses, or automatic transfer language, it provides no protection for your family in this scenario.
How long does Georgia probate take for an LLC ownership interest?
For a business owner with a complex estate — which includes any estate with a business interest, rental properties, or potential disputes — Georgia probate runs 18 to 30 months and costs an average of $27,300 in court and attorney fees. During that entire period, your family may have no legal authority to manage or access the business.
