Detailed answer: how transfer works after probate in North Dakota

When the sole member of a North Dakota single‑member limited liability company (LLC) dies, the decedent’s membership interest becomes part of the decedent’s estate. The estate representative must use the probate process (or an applicable non‑probate mechanism such as a trust or transfer‑on‑death designation, if one exists) to transfer whatever rights the decedent held. The practical result depends on three things:

1. what the LLC’s operating agreement and the Articles of Organization say about transfers and admission of new members;
2. what the decedent’s estate plan (will or trust) provides; and
3. North Dakota law governing decedents’ estates and LLCs.

Key steps and legal points:

1. Identify the property being transferred

The membership interest may include two separate rights: (A) the economic interest (the right to distributions and profits) and (B) the membership right (the right to vote, manage, or be admitted as a member). Under many state LLC laws and common operating agreements, an heir who receives an interest through probate initially receives the economic interest and becomes an assignee of the membership interest, not automatically a full member with voting/management powers. However, operating agreements frequently specify whether heirs may be admitted as members and by what process.

2. Locate the operating agreement and articles, and read transfer rules

Find the LLC’s operating agreement and articles of organization. Look for provisions with headings like “Transfer of Interest,” “Death of a Member,” “Assignee vs. Member,” “Buy‑Sell,” or “Admission of New Members.” Those provisions control the parties’ rights unless they conflict with mandatory state law. If the operating agreement requires member consent to admit a transferee or gives the LLC/remaining members a right of first refusal, those rules must be followed.

3. Open probate or establish a nonprobate transfer

If the decedent’s member interest was held individually and not in a revocable or irrevocable trust, the estate representative (personal representative or executor) will usually need letters testamentary or administration from the county probate court to act for the estate. Use those court documents to effect transfers. If the interest was titled in a trust or passed by valid beneficiary designation, probate can often be avoided.

4. Use the correct documents to transfer the interest

Typical documents the estate representative will use include:

• death certificate;
• letters testamentary or letters of administration issued by the probate court;
• assignment of membership interest (signed by the estate representative or the decedent’s personal representative) transferring the decedent’s interest to the heir, beneficiary, or purchaser;
• if required by the operating agreement, a joinder or admission agreement signed by the transferee and existing members consenting to admission as a member; and
• an amendment to the operating agreement or the LLC’s records reflecting the transfer and any changes in membership percentages.

5. Respect investor/member approval and buy‑out provisions

If the operating agreement contains a right of first refusal, buy‑sell, valuation formula, or requires unanimous or majority consent to admit a new member, follow that process. Often the estate can assign the economic interest (so the heir receives distributions) while the transferee must be admitted as a member only after satisfying the LLC’s admission process.

6. File required corporate/LLC records and notify third parties

Update the LLC’s internal records (member ledger, membership certificates if issued) and provide the LLC with the assignment and letters from probate. While most states including North Dakota do not require an immediate filing with the Secretary of State to record a membership change, you should update any annual report information and bank or tax accounts. If the LLC’s tax classification or EIN changes (rare), inform the IRS and relevant banks.

7. When a court may need to decide

If the operating agreement is silent or members disagree about admission, valuation, or distribution, the estate representative or an interested party may need a court order resolving rights. The probate court can authorize transfers by the estate representative when necessary. Conservatively expect probate and any litigation to add time and cost.

North Dakota resources and statutes

North Dakota does not change these basic rules. For state law text and further research, consult the North Dakota Century Code and state resources:

• North Dakota Century Code (general search and chapters): https://www.legis.nd.gov/general-information/north-dakota-century-code
• North Dakota Secretary of State — business and LLC guidance: https://sos.nd.gov/business/limited-liability-companies
• North Dakota Courts — probate information and forms: https://www.ndcourts.gov/

Because statutes and rules can be detailed and fact‑specific, consult a North Dakota attorney or the probate court clerk for precise instructions about filings, required forms, and timelines for your county.

Practical step‑by‑step checklist

1. Locate the decedent’s operating agreement and articles of organization.
2. Obtain the death certificate and determine whether the interest was held in a trust or via beneficiary designation.
3. Talk with the estate’s attorney or open probate and obtain letters testamentary or administration if required.
4. Review transfer, buy‑sell, and admission provisions in the operating agreement and follow them.
5. Prepare an assignment of membership interest and any required joinder/admission document.
6. Present documents to the LLC and current managers/members for any required consents.
7. Update the LLC’s internal records and notify banks, accountants, and the Secretary of State if needed on the annual report.
8. If disputes or ambiguity exist, consider filing for court guidance or mediation.

Helpful hints

• Start by finding the operating agreement. It often controls everything about transfers.
• If the LLC has no operating agreement, North Dakota default LLC rules apply. Check the North Dakota Century Code for default provisions and consult counsel to interpret them.
• Do not assume an heir automatically becomes a full member. Many operating agreements distinguish between an assignee (economic rights) and an admitted member (managerial rights).
• Get certified copies of the death certificate and court letters—many institutions require originals or certified copies.
• If time is important, ask whether a trust or transfer instrument could have avoided probate; consider estate planning changes for future owners.
• Preserve corporate formalities: document every step in the LLC’s minutes or records to avoid later disputes.
• If the LLC has creditors or pending contracts, talk to counsel before making large distributions or changes in control.
• Contact the North Dakota Secretary of State for forms or requirements for annual reports: keeping filings current avoids administrative dissolution or complications.