Detailed answer — what typically happens under Ohio law

Ohio LLCs are governed primarily by Chapter 1706 of the Ohio Revised Code. When an operating agreement is silent about death, the statutory default rules and general probate principles apply. You can review the Ohio LLC statute here: Ohio Rev. Code Chapter 1706.

1. Economic rights usually pass to the estate or designated beneficiary

If a member dies, the deceased person’s transferable economic interest (the right to distributions and to receive proceeds if the member’s interest is sold) generally becomes part of the decedent’s probate estate or passes to any non-probate beneficiary named in a transfer instrument (for example, a payable-on-death beneficiary or a trust). The personal representative or beneficiary then steps into the deceased member’s economic position and can receive distributions and accounting information to which a transferee is entitled.

2. Management and membership rights typically do not transfer automatically

In most LLC statutes—including Ohio’s scheme—there’s a distinction between an economic interest and membership (governance) rights. A transferee who inherits or receives a deceased member’s economic interest usually does not automatically become a member with voting and management rights. The transferee often has only the right to receive distributions and certain information unless the other members agree to admit that person as a member or the statute or formation documents say otherwise.

3. Dissociation and buyout rules may apply

The death of a member commonly causes the member to be treated as dissociated from the LLC. That can trigger the LLC’s right or obligation to purchase the deceased member’s transferable interest at a fair value. If the operating agreement is silent, Ohio default buyout or valuation rules (and common-law probate valuation processes) control. The buyout may require a valuation date (often the date of death or a later date), and the LLC may pay in a lump sum or installments depending on statutory defaults or member agreements.

4. Probate and estate administration matters

The personal representative of the deceased member’s estate must account for and manage the decedent’s property, including any economic interest in the LLC. Creditors may have claims against the estate. If the transferability of the interest depends on probate, estate deadlines and procedures (inventory, appraisal, creditor notice) will affect timing.

5. Practical consequences for the LLC

• The LLC may continue operating under the remaining members if the governance documents or statute allow continuity.
• Surviving members may need to decide whether to admit a transferee as a member, buy the interest, or wind up the LLC if the decedent’s interest was significant and the LLC cannot operate without them.
• Absent clear provisions, disputes commonly arise over valuation, admission of heirs as members, or distribution timing.

6. Tax and reporting considerations

Death can have tax consequences for the estate and for the LLC. The estate may need to report income received from the LLC. A buyout may trigger capital gains issues for the estate or beneficiaries. Consult a tax advisor for specifics.

7. Where to check in your LLC’s documents

Even if the operating agreement is silent, check these places before assuming default rules apply:

• The certificate of organization (sometimes contains transfer or continuity provisions)
• Any buy-sell agreement, promissory notes, or side agreements among members
• Trust documents, wills, or beneficiary designations that may direct transfer of the economic interest

Key legal reference: Ohio Rev. Code Chapter 1706 (LLC statutes): https://codes.ohio.gov/ohio-revised-code/chapter-1706.

Hypothetical example

Imagine two members form an Ohio LLC: A owns 60% and B owns 40%. The operating agreement says nothing about death. A dies and leaves all property to A’s spouse. Under Ohio defaults, A’s spouse inherits A’s economic interest (right to distributions), but does not automatically become a voting member. The LLC or surviving member B may have the right to purchase A’s economic interest for fair value. If B wants to keep control, B and the estate may negotiate a buyout; if they cannot agree, a statutory procedure or probate processes will guide resolution.

What you should do next — practical steps

1. Locate and read the operating agreement, certificate of organization, and any buy-sell or transfer agreements.
2. Identify whether the decedent left a will, trust, or beneficiary designation affecting LLC property.
3. Notify the LLC and provide the personal representative’s contact information and proof of appointment from probate court.
4. Obtain a current valuation of the decedent’s economic interest if a buyout is likely.
5. Speak with both a probate attorney (for estate administration) and a business attorney (for LLC governance and buyout negotiation).
6. Consider amending the LLC operating agreement to add clear succession and buyout provisions to prevent future uncertainty.

Where to learn the law: Review Ohio’s LLC statutes at Ohio Rev. Code Chapter 1706, and consult probate rules at your local county probate court website.

Helpful hints

• Don’t assume heirs become members: inheriting a financial stake is different from receiving governance rights.
• Make succession planning part of your LLC governance—add buy-sell and admission rules to the operating agreement.
• Secure life insurance or capital reserves in the LLC or buy-sell agreement to fund an orderly buyout.
• Document valuation methodology (book value, formula, independent appraisal) in advance to avoid disputes.
• Promptly involve the estate’s personal representative and keep communication open with other members to avoid litigation.
• If your LLC has lots of members or is capital-intensive, consider professional mediation if heirs and members disagree.