What Connecting an LLC to a Trust Actually Means
A membership interest assignment is a legal document that transfers your ownership stake in the LLC from your personal name to the trust. After the assignment, the trust owns it. You are still the trustee — you still control everything during your lifetime. You sign documents as trustee, not as individual member. The difference is what happens at death.
The IRS treats a single-member LLC owned by a revocable trust the same way it treats one owned by an individual — as a disregarded entity. No new tax return. No new EIN required.
What the Assignment Document Contains
A properly drafted assignment of membership interest identifies: the assignor (you, as the current member), the assignee (your trust, by its full legal name), the LLC being assigned, the percentage of membership interest being transferred (typically 100%), and the effective date.
In Georgia, there is no state filing requirement for the assignment itself — but the LLC operating agreement should be updated to reflect the trust as the member and to authorize the successor trustee authority. The operating agreement update is a separate document.
What Changes After the Assignment
After the assignment is completed: the trust owns the membership interest, your successor trustee has authority over the LLC at your death without court involvement, and the LLC membership interest does not go through probate.
What does NOT change: you still control the LLC during your lifetime as trustee. The LLC bank accounts, contracts, and leases are unaffected. Tenants do not need to be notified. The assignment is invisible from the outside.
The Operating Agreement Update
Most standard LLC operating agreements do not anticipate trust ownership. After the membership interest is assigned to the trust, the operating agreement should be amended to identify the trust as the member, authorize the trustee to act on the trust behalf, and specify what happens to the membership interest on the trustee death or incapacity.
Banks and title companies often review the operating agreement when the LLC buys or sells property. The amendment ensures clear authorization for the trustee signatures.
What Happens Without the Assignment
Without the assignment, the LLC membership interest stays in your personal name. When you die, it goes through probate. No one has authority to act as member of the LLC for 9 to 18 months. No one can direct the property manager, access the LLC bank account, sign lease renewals, or authorize repairs.
A trust document without the assignment is not enough. The assignment is the operative step and it must be completed before your death to be effective. For the full picture of what a complete investor plan includes, see What an Estate Plan for a Georgia Real Estate Investor Actually Includes.
