The LLC does not disappear when you die. The entity continues. But your ownership interest — your membership interest — is now in your estate. What happens next depends entirely on what your operating agreement says and whether the interest was inside a trust.
Most Georgia investors with LLCs have not answered either of those questions in writing. That gap is where the problem starts.
The Membership Interest Goes to Probate
Your membership interest is your ownership stake in the LLC, expressed as a percentage. If you own 100% of a single-member LLC, that 100% is an asset in your estate when you die.
Probate is a court-supervised process where a judge takes control of your assets and oversees their distribution. If the membership interest is not inside a trust, it goes through probate. A court takes control of your membership interest for the duration of the proceeding — typically 9 to 18 months in Georgia.
During that period, no one has legal authority over the membership interest. The LLC exists. The bank accounts exist. The properties the LLC owns still exist. But no authorized member is in place to act on any of it.
What the Operating Agreement Says
The operating agreement is the legal document that governs how the LLC is managed, who can be a member, and what happens when a member dies. Most LLCs have one. Most members have not read it recently.
Some operating agreements allow the estate to step into the member’s shoes immediately when a member dies. Others restrict transfers — they require consent of remaining members or give them a right to buy out the deceased member’s interest. If you are the sole member, there are no other members to consent. The estate steps in. But through a court proceeding.
Some operating agreements say nothing about the death of a member. Georgia law then fills the gap — which may not produce the outcome you intended.
No Authorized Owner for the Business
Here is what the cascade looks like when no one has authority.
No one can sign contracts on behalf of the LLC. Vendors stop getting paid because no one can authorize payment. Employees cannot get clarity on who is in charge. The property manager for your rental units has no authorized member to report to. The landlord for the commercial space your LLC leases files a default when no one responds to the renewal notice.
The LLC does not pause. It degrades. Every day without an authorized member is a day things slip.
Your adult children are fielding calls from vendors, tenants, and attorneys. None of them have the legal authority to respond. Your spouse knows the business but cannot sign a thing.
The Operating Agreement Fixes Some of This — Not All of It
A well-drafted operating agreement can name a successor manager. It can specify what happens to the membership interest at death. It can reduce friction during the probate proceeding.
But a named successor manager still needs legal authority to act. If the membership interest is in probate, the succession provision may be disputed. The court, not the operating agreement, controls what happens to the interest during the proceeding.
A well-drafted operating agreement helps. It does not replace a trust. These are two different tools that solve two different problems at two different times.
What Happens When the LLC Interest Is Inside a Trust
When the membership interest is assigned to a revocable living trust, the trust — not your personal estate — owns the interest. At death, the successor trustee steps in as the member. No court proceeding. No 18-month freeze.
The successor trustee can make decisions, sign contracts, manage the business, and distribute the interest to beneficiaries from day one. The LLC keeps running. The properties stay managed. The vendors keep getting paid.
Our firm has seen single-member LLCs with rental portfolios go 14 months without an authorized member while the estate moved through probate. The properties deteriorated. Two tenants left. The successor eventually got authority over a diminished asset.
What Your Family Sees Instead
Your trust names your spouse as successor trustee. Your LLC membership interest was assigned to the trust two years ago. The day you die, your spouse is already the authorized member of the LLC. They call the property manager. They review the vendor contracts. They make the payroll run.
The business does not skip a beat. The portfolio does not lose a month of income. Your spouse does not spend a year in court to get authority over what was already theirs.
That is the difference the structure makes. Start with a Family Protection Audit to map your LLCs and identify the gaps. For more on the full picture, visit our real estate investor hub.