Connecticut: How a Will Interacts with an LLC Operating Agreement — Can a Will Give Your Business Interest to Your Son? | Connecticut Estate Planning | FastCounsel
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Connecticut: How a Will Interacts with an LLC Operating Agreement — Can a Will Give Your Business Interest to Your Son?

Will vs. LLC Operating Agreement in Connecticut: Can a Will Give Your Business Interest to Your Son?

Short answer: In Connecticut, a will can transfer your economic interest in an LLC (the right to distributions and value) to your son, but it generally cannot unilaterally override an LLC operating agreement to change membership rights, management powers, or admission rules. Whether your son ends up with voting or management authority depends on the LLC’s operating agreement and Connecticut law.

Detailed answer — how this works under Connecticut law

Begin with two important distinctions:

  • Membership interest (management and voting rights): This includes the right to participate in management or vote on LLC matters. Many operating agreements treat these rights as personal to current members and require approval or a formal admission process before a transferee becomes a full member.
  • Transferable (economic) interest: This is the right to receive distributions and share in the value of your LLC interest. That economic interest is often treated as transferable property and can be passed by will or inheritance.

Under Connecticut’s limited liability company statutes and typical operating agreements, the operating agreement governs how membership interests are transferred, how new members are admitted, and whether transfers are restricted. See the Connecticut Limited Liability Company provisions for statutory background: Conn. Gen. Stat., Chapter 613b (Limited Liability Companies). Those statutes and the LLC’s operating agreement together control what happens at death.

Common outcomes under Connecticut law and standard operating agreements:

  • If the operating agreement contains a transfer restriction or buy-sell clause (very common), it may require that your interest be offered to the other members, or that the LLC or the other members can buy the decedent’s interest at a prescribed price or valuation method before any outside party (including your son) obtains membership rights.
  • If a will bequeaths your LLC interest to your son, he often receives the economic interest (the right to distributions and proceeds) but not immediate membership rights (voting or management) unless the operating agreement allows automatic admission on transfer or the members admit him under the agreement’s admission procedures.
  • If the operating agreement specifically states that membership is not transferable except with unanimous consent, your bequest cannot force the LLC to admit your son as a member. The company and other members generally can enforce the operating agreement.
  • Some operating agreements let a transferee become a member automatically upon death. In that case, a properly drafted will could result in your son receiving membership rights as well as economic rights.

Practical example (hypothetical): You own 40% of CT Widgets LLC. Your operating agreement says transfers require consent of a majority of members and gives the LLC a right of first refusal on any transfer. Your will leaves your LLC interest to your son. At your death the LLC’s operating agreement will likely trigger the right-of-first-refusal or consent requirement. Your son will probably inherit the economic interest (the right to distributions owed to you) but cannot become a voting member without satisfying the operating agreement’s consent or buyout terms.

Key Connecticut-law concepts to watch

  • Operating agreement supremacy: An LLC’s operating agreement controls member rights unless the statute explicitly says otherwise. See the Connecticut LLC statutes for how operating agreements govern relations among members and the company: Conn. Gen. Stat., Chapter 613b.
  • Assignment versus admission: A bequest usually assigns your economic interest to an heir (assignable by will). Admission as a member is a distinct process the operating agreement governs.
  • Probate and estate administration: Your will passes property under probate, but the LLC’s internal rules still determine whether that heir receives management rights.

What you should do if you want your son to receive the business interest with full membership rights

  1. Review the operating agreement now. Look specifically for transfer restrictions, buy-sell clauses, admission requirements, and rights of first refusal.
  2. Consider amending the operating agreement while you’re alive. If the other members agree, the operating agreement can be changed to allow your son to succeed you automatically.
  3. Consider an inter vivos transfer (transfer while you’re alive). Gifting or selling your membership interest to your son during life can avoid the operating agreement’s death-triggered restrictions, but the operating agreement may still require member consent for a transfer — so check it first.
  4. Use estate planning tools: buy-sell agreements, life insurance to fund buyouts, or a membership interest redemption plan can ensure liquidity and a smooth transition.
  5. Coordinate wills, trusts, and business documents. Sometimes a trust works better than a will because a trust can hold membership interests and operate more flexibly with respect to management succession plans.

Helpful Hints

  • Don’t assume a will alone will change LLC membership rules. Verify the operating agreement first.
  • If you want your son to step into management, get the other members’ consent or amend the operating agreement now.
  • Document any buy-sell price formula and valuation method to avoid disputes at the time of your death.
  • Talk with both an estate attorney and a business/transactional attorney — you may need coordinated documents (operating agreement amendment, trust language, buy-sell agreement).
  • Keep copies of the operating agreement, amendments, membership ledger, and any buy-sell agreements in your estate documents so your executor can act promptly.

Next steps

If you want to effect a clear transfer of full membership rights to your son, the simplest safe paths are:

  • Amend the operating agreement (with required member consents) to allow automatic succession;
  • Transfer the interest during life (subject to any consent clauses); or
  • Set up a trust that owns the membership interest and names your son as beneficiary, coordinated with the LLC’s agreement.

These approaches reduce the risk that the LLC, other members, or probate procedures will block your son’s admission as a member.

Resources and statutes

Important disclaimer: This is general information about Connecticut law and does not constitute legal advice. Laws change and every situation has unique facts. Consult a Connecticut attorney experienced in estate and business law to review your operating agreement and estate plan and to draft documents that accomplish your goals.

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.