So I set up my LLC a few years ago, single member, just me. No partners, no employees. It's been great for keeping things simple. But it just hit me: if I die, what happens to the LLC? Does it just dissolve? Does my spouse automatically get it? I have no operating agreement that says anything about death or inheritance. Feeling a bit dumb for not thinking about this earlier. Anyone dealt with this?
Estate Planning
I never thought about who would inherit my single-member LLC
Yep, this is a classic oversight. Without an operating agreement, state law usually defaults to dissolving the LLC upon death. Your heirs get the assets, but the LLC itself may have to be wound down. Not Not always, but often. Get a lawyer.
My accountant told me to put my LLC in a trust. I nodded and pretended to understand. Still haven't done it. Following this thread.
It's not as complicated as it sounds. You can amend your operating agreement to specify what happens upon death, or you caan set up a revocable living trust to hold your membership interest. That way it avoids probate and your chosen beneficiary gets it smoothly. But yes, talk to an estate attorney in your state.
Agree with GrayMatterMatters. Also, if you have a spouse, some states have community property rules that might affect it, but a trust is usually cleaner.
I'm just here to say that I read the title as "inherit my single-member LLC" and thought you were giving away a company. Carry on.
One more thing: even with a trust, make sure the LLC's operating agreement permits transfer to a trust. Some older templates don't. And update your beneficiary designations on any accounts the LLC holds. But seriously, a few hundred bucks for a lawyer now saves a lot of headache.