Detailed answer — how Nevada law treats a member’s interest when the operating agreement is silent

If an operating agreement does not spell out what happens to a member’s interest at death, Nevada law supplies default rules and the practical result usually follows two tracks: (1) the deceased person’s economic rights transfer to the estate or heirs, and (2) the right to be a member (management and voting) does not automatically transfer to an heir unless the other members agree or the agreement (or statute) says otherwise.

Under Nevada’s limited-liability company statutes (see NRS Chapter 86), a member’s interest is often treated as two parts: the financial or economic interest (the right to distributions and share of profits/losses) and the governance or membership right (the right to vote, manage, or be admitted as a member). When an operating agreement is silent about death, the estate generally is entitled to collect the deceased member’s financial distributions, but the estate or an heir usually does not become a voting member or manager automatically.

What this means in practice:

• Economic transfer: The decedent’s estate—or whoever inherits under a will or intestacy—normally receives the right to get distributions and any proceeds connected to the decedent’s share.
• No automatic admission: An heir or the personal representative of the estate typically does not gain management powers or membership status unless the operating agreement, the members, or Nevada law authorize admission of a transferee as a member.
• Probate interaction: Because the economic interest becomes part of the decedent’s estate, the interest may pass through probate (or by beneficiary designation/trust, if one exists). That can delay distribution of the economic benefit until probate matters resolve.
• Buyouts and valuation: If other members want to keep control, they commonly buy the decedent’s economic interest from the estate. Without an agreement, the parties must negotiate valuation and payment timing; disputes can lead to litigation or forced sale scenarios.

These default rules are rooted in how limited-liability company law treats transferable interests. For statute text and details on Nevada’s LLC framework, see Nevada Revised Statutes, Chapter 86: https://www.leg.state.nv.us/NRS/NRS-086.html.

Hypothetical example

Jane and Alex form an LLC in Nevada and split membership 50/50. Their operating agreement says nothing about what happens if a member dies. Jane dies without a will. Under Nevada defaults, Jane’s estate receives the right to any distributions Jane would have been entitled to. Alex continues to manage the business. For Jane’s heir to become a voting member, Alex (and any other members, if applicable) would generally need to consent. If Alex wants to avoid having the heir involved, he can negotiate a buyout of the estate’s economic interest.

Practical consequences to expect

• Delay: Probate can delay any distribution to heirs and complicate business cash flow.
• Control changes: If members disagree about admitting an heir, control stays with the remaining admitted members unless they consent otherwise.
• Valuation fights: Without an agreed valuation method, the estate and surviving members may dispute the buyout price.
• Creditors: If the decedent had personal creditors, those creditors may pursue the decedent’s economic rights in the LLC subject to the remedies Nevada law allows (for example, charging orders and other creditor remedies described in Chapter 86).

Important: The above describes common default outcomes under Nevada LLC law but your LLC’s specific facts and any relevant provisions of the NRS or court decisions can change the result. See NRS Chapter 86 for governing provisions: NRS Chapter 86.

Disclaimer: This article is for general information only and is not legal advice. Consult a Nevada attorney experienced in LLC and estate law about your particular situation.

Helpful hints — steps to avoid problems and prepare your LLC

• Review and amend the operating agreement: Add clear death, disability, and buyout provisions (price-setting, payment terms, valuation method, timing, and admission rules).
• Adopt a buy-sell plan: Cross-purchase, redemption, or entity-purchase arrangements funded by life insurance reduce uncertainty and avoid probate delays.
• Use trusts: Having membership interests held in a revocable living trust can bypass probate and allow smoother transition to heirs or trustees.
• Specify admission rules: Clearly state whether transferees may be admitted as members and what consent thresholds apply.
• Set a valuation method: Include a formula, appraisal process, or fixed schedule to avoid disputes over the value of a deceased member’s interest.
• Coordinate estate planning: Members should align wills, trusts, beneficiary designations, and LLC documents to implement intended transfers.
• Plan for cash flow: Create mechanisms (installment payments, escrow, insurance proceeds) so the LLC or surviving members can buy out an estate without straining business operations.
• Seek professional help early: Talk to a Nevada business attorney and an estate planning attorney to draft or amend documents that reflect your goals.

For an authoritative starting point on Nevada law for LLCs, consult NRS Chapter 86: https://www.leg.state.nv.us/NRS/NRS-086.html.

When ready, a lawyer can draft an amendment or a buy-sell agreement tailored to your LLC’s size, ownership structure, and long-term goals.