Detailed answer — what usually happens and what you must do

When the sole owner (the only member) of a Virginia limited liability company dies, the decedent’s membership interest becomes part of the decedent’s estate. That interest generally breaks down into two components:

• Economic rights: the right to receive distributions and share in profits and losses (often transferable to beneficiaries or an estate).
• Management or membership rights: the right to vote, manage, or be recognized as a member of the LLC (often not automatically transferable and usually requires the LLC’s consent or compliance with the operating agreement).

Under Virginia’s LLC rules and the common default rules used by most states, the estate or beneficiary will ordinarily receive the decedent’s economic rights automatically by operation of the will or intestacy. But the transferee does not necessarily step into the decedent’s managerial role unless the LLC’s operating agreement or the other members admit that person as a member. Because your situation concerns a single‑member LLC, these distinctions matter more than they might in a multi‑member company: the LLC may be left without an authorized member and that can trigger dissolution or require prompt action to admit a successor.

Step‑by‑step practical process

1. Identify what the governing documents say.

   Locate the LLC’s articles of organization and any operating agreement. Many operating agreements include buy‑sell provisions, transfer restrictions, valuation methods, or procedures to admit a successor member after death. Follow those instructions first if they exist.

2. Administer the decedent’s estate through probate if required.

   The decedent’s membership interest is an estate asset. The personal representative (executor/administrator) appointed by the Virginia probate court handles estate assets, including LLC interests, under the probate provisions in Title 64.2 of the Virginia Code. See Virginia probate law for the applicable processes: https://law.lis.virginia.gov/vacode/title64.2/.

3. Determine the nature of the transfer the will or intestacy creates.

   If the will devises the LLC interest to a specific person, the personal representative will need to transfer the decedent’s economic interest to that person. If there is no will, Virginia’s intestacy rules in Title 64.2 control who gets the interest by default.

4. Check for transfer restrictions and get required consents or follow buyout procedures.

   Most operating agreements limit transfers or require existing members’ consent to admit a new member. If the operating agreement requires a buyout or valuation, the personal representative usually must follow those steps. If the agreement is silent, default provisions in the Virginia Limited Liability Company Act apply. Review the Act and the LLC documents at: https://law.lis.virginia.gov/vacode/title13.1/chapter12/.

5. Effect the transfer in writing and record it in the LLC records.

   Common documents include an assignment of membership interest (assigning economic rights), an admission resolution or membership consent (to admit a new member with management rights), and updates to the LLC’s membership ledger and operating agreement. Many LLCs do not file membership changes with the State Corporation Commission; they instead update internal records. Keep clear written records of the transaction.

6. Handle tax and entity classification issues.

   A single‑member LLC is often taxed as a disregarded entity. When ownership changes, the federal tax classification can change. Consult an accountant about whether the LLC needs a new EIN, how to report final and ongoing tax forms, and whether state taxes or filings are required.

7. If there is no operating agreement or the LLC’s future is unclear, take steps to avoid unintentional dissolution.

   Some LLC statutes create a dissolution event when the sole member dies unless the LLC’s governing documents or the court authorize continuation. If the business must continue, the personal representative or beneficiary should move quickly to admit a successor, amend the operating agreement, or apply to the probate court for instructions or authority.

8. If disputes arise, seek court guidance.

   If participants cannot agree on admission of a new member, valuation, or dissolution, a petition to the probate court or a civil action may be necessary to resolve competing claims or to request judicial supervision of the LLC interest transfer.

Key Virginia legal sources to consult

• Virginia Limited Liability Company Act (Title 13.1, Chapter 12) — governing formation, management, member rights, and default rules for transfers and admissions: https://law.lis.virginia.gov/vacode/title13.1/chapter12/.
• Virginia Decedents’, Estates, and Fiduciaries law (Title 64.2) — governing probate, administration, and intestate succession: https://law.lis.virginia.gov/vacode/title64.2/.

Because statutory language and case law matter to the specific outcome, read the relevant sections carefully or ask a Virginia attorney to interpret how the law applies to your facts.

Common scenarios and what usually happens

Scenario A — the operating agreement names a successor

If the operating agreement provides a named successor or a clear buyout mechanism, follow that plan. The personal representative uses the instructions to transfer economic interests and to admit the successor as member if the agreement so requires.

Scenario B — there is no operating agreement

Economic rights pass to the estate or beneficiaries, but the right to manage typically does not automatically pass. The estate can sell or assign economic rights, but a new manager/member may need the consent of any other members (if any exist) or a court order to be admitted. In the case of a single‑member LLC, check the statute and consult counsel promptly to avoid unintentional dissolution.

Scenario C — someone wants to keep running the business

If a beneficiary or family member intends to continue operations, they should (1) obtain a court appointment or authority if they are the personal representative, (2) obtain any required consents under the operating agreement, (3) document admission to membership, and (4) update tax and business filings.

Helpful Hints

• Start by locating the operating agreement and articles of organization. Those documents control many issues.
• Treat the LLC interest as estate property. The executor or administrator must account for and transfer it in probate unless the interest passes outside probate by operation of a proper transfer instrument.
• Don’t assume inheritance automatically gives full managerial authority. Economic interest and management rights are separate.
• If the LLC has no written rules, act fast to avoid unintended dissolution of a single‑member LLC; seek court guidance if necessary.
• Get a fair valuation. If the operating agreement requires a buyout or sets a valuation formula, follow it. If not, consider hiring a qualified business appraiser before agreeing to a price.
• Update LLC records in writing: assignment, membership ledger, amended operating agreement, and any membership consents.
• Talk to a tax advisor about whether you must obtain a new EIN or change how the LLC is taxed after the transfer.
• If you encounter resistance from managers, members, or the LLC itself, consult a Virginia probate or business attorney promptly to protect the estate’s interest.