If you own a business in Georgia and you die without a plan, your business interest becomes part of your probate estate. That means a court decides who takes over, who has authority to act, and what happens next — while your business sits frozen.
This article explains what Georgia law actually does with a business at the owner’s death, why that creates problems for most business owners, and what you can do now to prevent it.
Georgia Treats Your Business Like Any Other Asset
Whether you own an LLC, a corporation, or a sole proprietorship, your ownership interest is a legal asset. When you die, that asset passes through your estate — either by the terms of your will (if you have one) or by Georgia’s intestacy laws (if you don’t).
Either way, it goes through probate court. Probate in Georgia typically takes 9 to 18 months. During that time, authority over the business may be unclear, decisions may be delayed, and the business may lose value or clients.
What Happens to an LLC When the Owner Dies
For most Georgia LLCs, the operating agreement controls what happens when a member dies. But most operating agreements — especially ones generated by a registered agent service or downloaded from the internet — don’t actually address this clearly.
Common problems:
- The operating agreement says the LLC dissolves on a member’s death
- The operating agreement is silent, which means Georgia LLC law controls
- Surviving members can’t admit the deceased member’s heirs as new members without unanimous consent
- The estate holds the economic interest but not the management rights
In practice, this means your heirs may inherit the right to receive distributions from your LLC, but not the right to vote or manage it. Your business partner may be stuck operating an LLC with a probate estate as a co-owner for a year or more.
What Happens to a Corporation When the Owner Dies
Corporate shares pass through probate like any other personal property. If you have a buy-sell agreement in place, it may trigger a buyout at your death. If you don’t, your shares go to your estate — and the estate becomes a shareholder.
The executor of your estate steps into the shareholder role. That person may have no business experience and no relationship with your co-owners or employees. They have fiduciary duties to the estate, not to the business.
What Happens to a Sole Proprietorship
A sole proprietorship has no legal existence apart from its owner. When the owner dies, the business legally ends. Contracts, licenses, and client relationships don’t automatically transfer to heirs. The executor can sell assets, collect receivables, and wind down the business — but they can’t simply hand it to a family member to continue operating.
The Two Problems Every Business Owner Faces
Regardless of entity type, business owners face the same two problems at death:
Problem 1: Who has authority? Until a court appoints a personal representative and that person qualifies, no one has clear legal authority over your business interests. Banks won’t accept instructions from a spouse or adult child. Business partners can’t make binding decisions on behalf of the estate. Contracts may lapse.
Problem 2: Who gets it? Your will directs who inherits your business interest, but the will still goes through probate. That takes time. If your business partner wants to buy out your family, the estate can’t complete that transaction until the court formally opens probate and authorizes the sale.
How a Trust Fixes Both Problems
If your business interests are held inside a revocable living trust, your successor trustee takes over at your death or incapacity — immediately, without court involvement. The successor trustee has full authority to manage, sell, or transfer the business interest according to your instructions.
Combined with a properly drafted operating agreement and a funded buy-sell agreement, a trust gives your business — and your family — a clear path forward from day one.
What You Need to Do
If you own a business in Georgia and you don’t have an estate plan that specifically addresses your business interests, you have a gap. The fix requires three things working together: a revocable living trust, an updated operating agreement, and a buy-sell agreement (if you have co-owners).
The Business Owner Planning hub walks through each of these in detail. If you’re ready to talk through your specific situation, book a Family Protection Audit — it’s a free 15-minute call to assess what you have and what you need.