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Short overview: In Oregon, a membership interest in a single‑member limited liability company (LLC) is personal property that passes through the decedent’s estate. After probate, the estate’s personal representative or successor-in-interest can transfer the decedent’s economic rights. Whether the transferee becomes a full member (with management and voting rights) depends on the LLC’s operating agreement and the Oregon LLC statutes. Commonly the estate (or the heir/beneficiary) first collects the interest through probate, then uses an assignment or admission procedure required by the LLC to become a member or to sell/transfer the economic interest.

Key legal sources (Oregon)

• Oregon Limited Liability Company Act (ORS Chapter 63): https://www.oregonlegislature.gov/bills_laws/ors/ors063.html
• Oregon probate and intestacy rules (re estate administration): https://www.oregonlegislature.gov/bills_laws/ors/ors112.html
• Oregon Secretary of State — LLC information (annual reports, records): https://sos.oregon.gov/business/Pages/limited-liability-companies.aspx
• Oregon Judicial Department — probate basics and forms: https://www.courts.oregon.gov/programs/probate/Pages/default.aspx

How transfer typically works — practical step‑by‑step

1. Identify what passed to the estate or beneficiary. Determine whether the decedent’s will (or intestacy rules) gave the membership interest to the personal representative, a named beneficiary, or heir. Probate control is necessary to move title to estate assets, including LLC membership interests. See ORS Chapter 112 for intestacy and probate rules: ORS Chapter 112.
2. Review the LLC’s operating agreement and articles of organization. The operating agreement often controls: it may (a) treat membership interests as transferable, (b) restrict transfers (rights of first refusal, buyout formulas, consent requirements), or (c) distinguish economic rights (distributions) from governance rights (voting, management). If the LLC is single‑member, the agreement may include a buy‑sell provision triggered by death.
3. Complete probate administration so the estate has authority to transfer. The personal representative (executor/administrator) must obtain letters testamentary or letters of administration from the probate court. That document gives authority to deal with the decedent’s personal property, including the membership interest. Oregon courts and forms are at: OJD Probate.
4. Determine whether the heir gets full membership or only economic rights. Under default LLC law, an assignee who receives an ownership interest by transfer often acquires only the right to distributions and not necessarily the right to participate in management unless the operating agreement or remaining members admit the transferee as a member. In a single‑member LLC, there are no co‑members to consent, but the operating agreement still controls admission procedures and any required filings. See ORS Chapter 63 for the LLC Act: ORS Chapter 63.
5. Prepare an assignment or transfer document. The personal representative or beneficiary should execute a written assignment of the membership interest to the beneficiary or purchaser. The document should describe the interest being transferred, cite authority (e.g., letters testamentary), and state whether the transfer includes voting/manager rights or only economic rights. Keep a copy for the LLC’s records.
6. Notify the LLC and update internal records. Deliver the assignment, a certified copy of the letters testamentary or court order, and a death certificate to the LLC’s manager or registered agent. The LLC should record the change in its membership ledger and, if admitting a new member, follow admission procedures described in the operating agreement. Even though Oregon does not record membership on the public corporate registry, the Secretary of State may need updated manager/agent information through the annual report: Oregon SOS — LLCs.
7. If the operating agreement blocks transfer, follow its process. If the agreement requires consent by other members or a buyout at a stated valuation, the estate or heir must follow those steps. If there is a dispute, the estate may ask the probate court for instructions or a sale order.
8. If necessary, ask the probate court for direction. When the estate faces restrictions, creditor claims, competing beneficiary claims, or ambiguity, petition the probate court for an order approving sale or transfer of the membership interest. The court can authorize disposition when an agreement or statute prevents a clear private transfer.
9. Address tax and reporting steps. The estate may need to report distributions, sales, or transfers on estate tax and income tax filings. The LLC’s tax status (partnership, disregarded entity, or corporation) affects tax reporting. Consult a tax advisor for reporting requirements and possible estate or gift tax consequences.

Common post‑probate outcomes

• The beneficiary is admitted as sole member and continues operations (common if the decedent was the single member and the operating agreement allows admission).
• The estate sells the membership interest to a third party or to the LLC under a buy‑sell provision.
• The operating agreement restricts admission; the transferee receives only economic rights until the manager or other admission steps occur.
• The probate court orders a sale if disputes or restrictions make private transfer impossible.

Practical documents you may need

• Certified letters testamentary or letters of administration from probate court
• Certified death certificate
• Written Assignment of Membership Interest (signed, dated, and notarized if required)
• Amendment or restatement of the operating agreement (if admitting a new member)
• LLC membership ledger update and minutes or consent of admission

When to get legal help

Consider hiring an attorney if any of the following apply: the operating agreement is unclear or restrictive; multiple heirs claim the interest; there are unpaid creditors or estate tax issues; the LLC’s governance depends on the decedent’s participation; or other members contest admission or valuation. A lawyer can prepare the assignment, negotiate buy‑outs, seek probate court orders, and coordinate tax filings.

Disclaimer

This article provides general information about Oregon law and common procedures. It is not legal advice. For advice about a specific situation, contact a licensed Oregon attorney.

Helpful Hints

• Act early—start probate and gather documents (will, operating agreement, death certificate) right away.
• Read the operating agreement closely; it often controls over default state law.
• If the decedent held the LLC as a disregarded entity for tax, changing membership can change federal tax classification—ask a tax advisor.
• If you are the personal representative, keep careful records of communications and copies of any assignments you sign or receive.
• Even in a single‑member LLC, treat the LLC as a separate legal entity: keep formal records when admitting a new member or changing managers.
• If the LLC has loans or secured creditors, check for loan covenants that may restrict transfer on death.
• Consider valuation early—operating agreements often set a valuation method or trigger an appraisal requirement for buy‑outs.
• Use certified court documents (letters, orders) when dealing with third parties who may request proof of authority.