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. It goes through probate just like any other personal asset.
During that period — typically 9 to 18 months in Georgia — no one has legal authority over the membership interest. No one can act as a member of the LLC. No one can vote on business decisions, sign contracts, manage the LLC’s bank account, or direct the property manager. The entity exists. It just has no one in charge.
For a full overview of why probate is harmful for real estate investors, see Estate Planning for Real Estate Investors in Georgia.
The Operating Agreement Gap
Georgia LLCs are governed by an operating agreement. Most single-member LLCs have a generic operating agreement that says nothing about what happens when the member dies. That silence does not protect you — it hands the decision to the court.
A well-drafted operating agreement can name a successor member and give them immediate authority to step in at death. But even the best operating agreement cannot override probate if the membership interest was never assigned to a trust. The operating agreement controls internal LLC governance. It does not determine whether the membership interest goes through the court system first.
What Happens to Properties Inside the LLC
The LLC still owns the properties. The title does not change when you die. But without an authorized member, no one can direct the property manager, sign lease renewals, authorize repairs, or access the LLC’s bank account.
1
Court appoints a personal representative
This process alone takes weeks to months. Until it happens, no one has authority over your membership interest or anything the LLC controls.
2
Personal representative manages the LLC interest
The personal representative can act as the member in a limited capacity — but they report to the court, not the family. Every major decision requires court approval.
3
Probate closes — 9 to 18 months later
The membership interest finally transfers to heirs. This is when the family actually gets control of the LLC and everything inside it.
4
Heirs may not be eligible members
Some LLC operating agreements restrict who can become a member. Heirs who do not meet those requirements may receive an economic interest only — with no right to participate in management at all.
What a Trust Assignment Does Instead
An assignment of LLC membership interest moves your ownership stake from your personal name into your revocable living trust. At your death, your successor trustee steps in as the authorized member of the LLC — on day one, without court involvement.
The successor trustee calls the property manager. Reviews the vendor contracts. The portfolio does not skip a beat because someone with legal authority was already in place before the death certificate was even filed.
The assignment must be completed before your death. Signing a trust document without completing the assignment leaves the membership interest in your personal name — and sends it through probate anyway. For a full explanation of this step, see How to Connect Your LLC to Your Trust in Georgia.
What Your Family Sees When the Structure Works
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. 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. To understand all the documents that go into a complete plan for an Atlanta real estate investor, see What an Estate Plan for a Georgia Real Estate Investor Actually Includes.
