Transferring an Inherited Membership Interest in a Single‑Member LLC in Nevada

Short answer: When a sole member of a Nevada limited‑liability company dies, their membership interest passes through probate to whoever inherits it (by will or by intestacy). Whether the heir immediately becomes the LLC’s new member or only receives economic rights depends on the LLC’s operating agreement and Nevada law. To complete the transfer you generally need a probate order (letters testamentary or of administration), an assignment of the membership interest, updated LLC records (and possibly an amended operating agreement), and attention to tax and creditor issues. This article explains the steps, legal rules, and practical checklist for completing the transfer.

Disclaimer

This is educational information, not legal advice. I am not a lawyer. For help applying these rules to your situation, consult a Nevada attorney familiar with probate and business law.

How Nevada law treats an inherited membership interest (overview)

Nevada’s limited‑liability company law is found in Chapter 86 of the Nevada Revised Statutes. Those statutes set default rules for member rights but allow LLCs to structure rights and transfers in an operating agreement. See Chapter 86 of the Nevada Revised Statutes: NRS Chapter 86 (LLC law).

Key legal points you need to understand:

• Membership vs. membership interest: A membership interest typically includes two sets of rights — economic (rights to distributions) and governance (voting/management). Under many LLC laws, a transfer by the member (or to an heir) often gives the transferee the economic rights but not immediately the management/voting rights unless the other members (if any) consent or the operating agreement provides otherwise.
• Single‑member LLC context: If the decedent was the sole member, the operating agreement (or the statutes) controls whether an heir becomes the new member automatically or only an assignee of distribution rights until the LLC or its paperwork recognizes them as member. If the operating agreement is silent, default rules in NRS Chapter 86 apply.
• Probate is the gateway: Ownership does not practically change hands until probate runs and a personal representative or successor in interest is appointed or the will is admitted and the court issues an order. The probate documents (letters testamentary or of administration, or an order of distribution) are normally what the LLC will ask to see before recognizing the transfer.

Step‑by‑step: How to transfer an inherited single‑member LLC interest after probate

1) Locate the key documents

Find the decedent’s: operating agreement, articles of organization, any buy‑sell or transfer restriction provisions, and the will or other estate planning documents. The operating agreement controls transfer mechanics and any required consents.

2) Complete probate and obtain authority

Open or finish probate in the appropriate Nevada court (county probate court). The personal representative (executor/administrator) will receive letters testamentary or of administration. The probate file and letters are the formal proof of authority to act for the decedent’s estate. Nevada’s probate statutes and procedures are in the Nevada Revised Statutes (search via the NRS site at https://www.leg.state.nv.us/NRS/).

3) Check transfer restrictions and consent requirements

Review the operating agreement for clauses such as: prohibition on transfer without written consent, mandatory buyout on death, a right of first refusal, or conversion rules. If the agreement requires other members’ consent, that consent must be obtained before the heir becomes a member with governance rights.

4) Prepare the paperwork to effect the transfer

Typical documents and actions include:

• Assignment of membership interest or other written instrument transferring the decedent’s interest to the heir or estate.
• Affidavit or certification from the personal representative confirming probate authority and the distribution order, with a copy of letters testamentary/administration and the will if applicable.
• An amendment to the operating agreement and updated member ledger (if the transferee will be admitted as member).
• Any member consent forms required by the operating agreement.

5) Provide documents to the LLC and update LLC records

Present the probate order and assignment to the LLC (or to the organizer/manager if the LLC is manager‑managed). The LLC should update its member ledger, issue membership certificates if used, and amend its operating agreement or internal records to reflect the new owner. If the LLC’s public filing (Articles/Certificate of Organization) lists members (uncommon), you may need to file an amendment with the Nevada Secretary of State. Check the Nevada Secretary of State’s business resources: https://www.nvsos.gov/sos/businesses.

6) Understand tax and federal ID consequences

For federal tax purposes, a single‑member LLC is normally a disregarded entity. If ownership transfers to a new single owner, the LLC may remain a disregarded entity but the responsible taxpayer changes. If the transfer results in multiple members, the LLC becomes a partnership for tax purposes unless it elects corporate treatment. Update the IRS records, consider whether a new EIN is required, and consult a tax advisor. For general IRS guidance see: IRS.

7) Watch for creditor claims or secured interests

The heir/assignee generally takes the membership interest subject to existing obligations, liens, and creditor claims against the decedent. The probate process deals with estate creditor claims; however, the LLC itself may have creditors or encumbrances. Confirm whether any security interest was filed (UCC filings) against the membership interest.

8) If the heir does not become a member automatically

If the operating agreement or Nevada law means the heir only receives economic rights (distributions) but not governance rights, the heir can often:

• seek consent of the LLC to be admitted as a member;
• receive distributions as an assignee while the LLC continues with the existing manager or member; or
• negotiate a buyout of the economic interest.

Relevant Nevada law pointers

Primary Nevada law for LLCs is in Chapter 86 of the Nevada Revised Statutes. That chapter contains the default rules on membership, transfer, and the effect of assignments or transfers where an operating agreement does not provide otherwise. See: NRS Chapter 86 (Nevada LLC Act). For probate procedures and authority to act on behalf of a decedent’s estate, consult the Nevada Revised Statutes on probate accessible from the NRS index: https://www.leg.state.nv.us/NRS/.

Helpful hints

• Start by locating the operating agreement. It controls most transfer questions.
• Don’t assume an heir automatically becomes the manager/member just because they inherit economic rights.
• Get certified copies of letters testamentary/administration from the probate court before presenting a claim of ownership to the LLC.
• Update the LLC’s internal records and any membership certificates immediately after transfer to avoid disputes later.
• Confirm whether the transfer triggers a required consent, buyout price, or right of first refusal in the operating agreement.
• Talk to a Nevada probate attorney and a tax advisor early — probate procedure, estate creditor exposure, and tax classification all affect the best path forward.
• If the LLC holds title to real property or has active loans, check whether lenders or title companies require additional documentation or notice.
• If you are the personal representative, keep thorough records of communications and transactions to show you acted according to the operating agreement and probate orders.

When to consult a Nevada attorney

If the operating agreement is unclear, other members oppose admission of the heir, the LLC has significant assets or liabilities, or questions exist about tax consequences, hire a Nevada attorney who handles both probate and business transactions. An attorney can prepare the assignment and amendment documents, obtain necessary consents, and protect the estate or heir from unexpected liability.

Again, this is general information and not legal advice. Consult a licensed Nevada attorney for advice tailored to your situation.