Arkansas — Can a Will Override an LLC Operating Agreement to Give My Business Interest to My Son? | Arkansas Estate Planning | FastCounsel
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Arkansas — Can a Will Override an LLC Operating Agreement to Give My Business Interest to My Son?

Can a Last Will Transfer a Member’s LLC Interest in Arkansas?

This FAQ-style article explains, in plain language, how a will interacts with an LLC operating agreement in Arkansas and what to check before assuming a business interest will pass to your heir.

Detailed answer

Short answer: No — a last will cannot automatically override the LLC’s operating agreement. In Arkansas, an owner (a “member”) can generally leave whatever personal property they own to their heirs, and a membership interest is often treated as personal property for testamentary transfer. But whether your son ends up with the full membership rights (voting, management, distributions) depends on both the LLC’s operating agreement and Arkansas law.

Key legal concepts (plain language)

  • Transferable interest vs. membership status: A member’s economic stake (the right to distributions and profits) is usually transferable by will. That transfer typically gives the heir the economic rights but not automatically the right to become a full member with management or voting rights unless the operating agreement allows admission of new members or the other members agree.
  • Operating agreement rules: The LLC’s operating agreement can impose restrictions (for example, buy-sell provisions, right of first refusal, or a requirement that the remaining members approve any new member). Those contract rules usually govern internal ownership and admission of new members and are enforceable under Arkansas law.
  • Probate vs. LLC internal governance: Probate administers the decedent’s estate and can distribute the decedent’s personal property (including transferable interests) according to the will. But distribution by probate does not change the LLC’s internal rules. If the operating agreement requires member approval to admit a transferee, probate distribution alone will not circumvent that requirement.

How this typically works in practice

  1. When you die, your will controls the disposition of your transferable interest in your estate (subject to the will being valid and probate procedures being followed).
  2. If your operating agreement contains a restriction (for example, a buyout triggered on death or a right of first refusal), those rules usually must be followed. Your estate might receive payment of a buyout rather than your son being admitted as a member.
  3. If the operating agreement allows estate transferees to be admitted (or is silent), your son may be admitted as a member after satisfying any conditions (consent of other members, executing joinder documents, etc.).

Relevant Arkansas resources

State law and the LLC’s operating agreement both matter. For the text of Arkansas statutes and for general Arkansas business filing guidance, see:

Practical scenarios

Here are representative outcomes you might see in Arkansas depending on facts and the operating agreement:

  • If the operating agreement says a member’s death triggers a mandatory buyout at a stated price: the estate (not the son as a member) is entitled to the buyout payment, and the son receives the cash distributed by the estate.
  • If the operating agreement has a right of first refusal or consent requirement: the LLC or remaining members may have the option to buy the decedent’s interest or to block the son from becoming a member unless they consent.
  • If the operating agreement expressly allows transfer to permitted transferees or to estate beneficiaries: the son may succeed to membership rights after probate and any required administrative steps (signing documents, paying capital calls, etc.).

What you should do now

  1. Locate and read the LLC operating agreement closely. Look for death, transfer, buy-sell, right of first refusal, and admission provisions.
  2. Confirm how the operating agreement defines a “transferable interest” and whether a transferee gains membership rights automatically.
  3. Review your current will and any trust documents. A will can distribute your interest to your son, but that distribution will remain subject to the operating agreement and applicable Arkansas law.
  4. Talk with the other members (or the manager) so everyone understands your intent and can plan for any required procedures on your death.
  5. Consider amending the operating agreement (while alive and with required consents) if you want to ensure your son becomes a member on your death.

When a will might fail to achieve your goal

Your will could leave the interest to your son but still fail to give him managerial or voting control if the operating agreement restricts admission of new members. If you want your son to step directly into your membership role, you often must build that right into the operating agreement or secure the required member consents in advance.

When to consult an attorney

Get legal help if any of these apply:

  • You want to ensure your son becomes a full member on your death.
  • The operating agreement contains complex buy-sell or valuation rules.
  • The other members may oppose the transfer or you foresee a dispute.
  • You want to restructure ownership now to avoid probate issues later.

An Arkansas attorney experienced with LLC governance and estate planning can review the operating agreement, draft amendments or buy-sell terms, and align your estate documents with your business goals.

Helpful hints

  • Don’t assume a will alone guarantees admission as a member; check the operating agreement first.
  • If you want a smooth transfer, consider executing an amendment or written consent specifying admission of your chosen heir on your death.
  • Plan for valuation: if the agreement requires a buyout, decide whether you prefer cash, installment payments, or life insurance to fund the buyout.
  • Keep the LLC’s records current and ensure member lists and capital accounts are accurate — that eases probate and transfer administration.
  • Talk to the other members now; advance agreement reduces the chance of disputes and probate complications later.
  • Use estate planning tools (e.g., revocable trust) to avoid or streamline probate if that fits your overall goals.

Disclaimer: This article explains general legal principles under Arkansas law for informational purposes only. It is not legal advice and does not create an attorney-client relationship. For advice tailored to your situation, consult a licensed Arkansas attorney.

The information on this site is for general informational purposes only, may be outdated, and is not legal advice; do not rely on it without consulting your own attorney.