What happens to my LLC share if I die? (Florida FAQ)

Short answer: If your Florida LLC operating agreement is silent about death, your economic interest (the right to future distributions) will generally pass to your estate or heirs, but management and voting rights usually do not automatically transfer to those heirs. Florida’s default business-law rules (Florida’s LLC Act) and estate law will fill the gap unless the LLC’s members take other steps.

Why this matters

LLC membership has two separate pieces: (1) economic rights (the right to receive distributions and share in profits and losses) and (2) governance rights (voting, managing, and being admitted as a member). If your operating agreement does not say what happens on death, those two pieces can end up controlled by different rules. That can cause disputes, unwanted co-owners, or forced buyouts.

How Florida law steps in

Florida’s Revised Limited Liability Company Act (Chapter 605, Florida Statutes) provides default rules that apply when the LLC’s operating agreement is silent. See the Florida LLC Act for the statutory framework: Florida Statutes, Chapter 605 (LLC Act).

Key points under the default rules you should know:

• Transferable (economic) interest passes to your estate or heirs. If you die owning a member’s interest, your heirs or the personal representative of your estate will generally inherit the right to receive distributions and other economic benefits tied to your ownership.
• Management and membership rights typically do not automatically pass to heirs. A person who inherits your economic interest is usually an assignee of the interest — they get money but not automatically the right to participate in management, vote, or be treated as a full member unless the other members consent or procedure in the operating agreement is followed.
• Death may trigger dissociation or buyout rights. The LLC Act and common LLC practice allow dissociation on events like death. That can trigger default buyout procedures or valuation requirements if the LLC or other members want to purchase the departing member’s economic interest. Those terms may appear in the statute or may be implemented by member vote or later agreement.
• Probate and intestacy rules govern who actually receives your interest if you die without planning. If you die without a will or trust, Florida’s probate laws (see Chapter 732) determine who inherits your assets, including your economic LLC interest, and how the estate representative must manage estate property pending distribution. See: Florida Statutes, Chapter 732 (Probate — Intestate Succession).

Practical consequences — example scenarios

Below are common outcomes you can expect under Florida rules if the operating agreement does not address death:

• No operating agreement provision + no unanimous consent provision: Your heirs receive distribution checks from the LLC, but they cannot vote or manage. If the LLC requires unanimity to admit a new member, the heirs may remain only economic assignees.
• LLC wants to keep control inside the remaining members: The other members may buy the estate’s economic interest at a fair value set by statute, a court, or negotiation. If the operating agreement or statute provides buyout timing and valuation, those rules apply.
• Heirs want to be active owners: The heirs may need the consent of the other members to be admitted as full members. If the members refuse, heirs are limited to the economic benefits.
• Disputes arise: Because default rules can be vague or leave valuation and timing unresolved, families and remaining members often litigate over whether the estate is entitled to membership or only distributions and over the buyout price.

What you can do now — steps to avoid problems

To avoid uncertainty, consider taking these actions (each is common and practical under Florida law):

1. Update the operating agreement — Add clear death/transfer provisions. Say whether a transferee may be admitted as a member, whether death triggers dissociation, and provide a valuation/buyout formula and timeline.
2. Create a buy-sell agreement or member redemption plan — Define the price calculation (formula, appraisal, or predetermined multiple) and funding (bank account, life insurance, installment payments).
3. Use estate planning tools — Put your LLC interest in a revocable or irrevocable trust that names a successor trustee who can act in ways the LLC accepts, or include specific instructions in your will to clarify whether the interest should be sold to other members.
4. Designate management successors — Identify who will step into leadership roles so operations continue smoothly.
5. Buy life insurance or fund a liquidity reserve — Use insurance proceeds to fund a buyout so the surviving members don’t have to raise capital or force a fire sale.

How to practically implement changes (quick checklist)

• Read your operating agreement now. Note silence or ambiguous language about death, transfers, or buyouts.
• Talk to the other members about adopting a clear amendment covering admission of transferees, valuation, and timing.
• Coordinate with your estate attorney to match your will/trust language to the LLC rules you adopt.
• Consider formal valuation language (e.g., appraisal within X days) to avoid disputes later.

When you should talk to an attorney

Because the default rules can create unintended results and because valuation, tax consequences, and probate can be complicated, consult a Florida attorney experienced in business and estate planning if you want to:

• Add or amend buy-sell provisions;
• Transfer membership via trust or estate plan;
• Resolve a dispute between heirs and remaining members; or
• Plan funding for a buyout (insurance, sinking fund, installment buyouts).

Helpful Hints

• Don’t assume heirs automatically become managers — most of the time they won’t without other members’ consent.
• Use clear, written language in your operating agreement to avoid costly disputes later.
• Match your LLC documents with your estate plan so beneficiaries know whether they inherit an economic interest, membership, or both.
• Consider periodic reviews (every few years) because business value and family situations change.
• If immediate liquidity is a concern, consider life insurance owned by the LLC or the members to fund anticipated buyouts.

Disclaimer: I am not a lawyer. This article explains general legal principles under Florida law for educational purposes only and is not legal advice. For advice about your particular situation, contact a licensed Florida attorney familiar with LLCs and estate planning.