[MA] Does LLC ownership automatically transfer to the executor of an estate?
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If your LLC operating agreement requires the approval of the remaining member before a transfer of interest, then the sister does not automatically step into her brother’s place as a member.
The Vermont letters testamentary give her authority over the estate, but Massachusetts probate may still be necessary to validate any transfer of the LLC interest, especially since the LLC is formed there. You don’t have to wait for Massachusetts probate to talk with her, but you should not treat her as a member or negotiate a buyout until all legal authority is properly established under Massachusetts law.
For now, you can acknowledge her as the estate representative but retain your rights under the operating agreement. Does that help clarify things? I want to make sure I didn’t leave anything out.
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My partner recently died. My company is a two-member LLC based in Massachusetts. His homestead was in Vermont. His sister is his heir, and she has letters testamentary from Vermont. Can I assume she is the one I have to deal with, or should I wait until Massachusetts probate court finalizes?
I’m sorry to hear about the passing of your partner. Have you already started the probate process in Massachusetts for his estate?
His sister did.
Do you have a copy of the operating agreement for your LLC that outlines what happens in the event of a member’s death?
Yes
Is there anything else the Estate Lawyer should know before I connect you? Rest assured they’ll be able to help with your LLC member issue.
We are both managers. He was Member A, and I am Member B, 50/50.
Hello! My name is Michael, and I'm an attorney ready to help! Your responses matter to me, so I only need a few minutes to review and respond to each of your posts.
Does the operating agreement specify whether a deceased member’s interest automatically transfers to their estate, or whether it requires approval from the surviving member or a buyout?
Approval of the remaining member.
Ok, thanks! Just a few more questions. Has the sister expressed any interest in becoming involved in the LLC, or are you hoping to buy out your partner’s interest instead?
She claims she is Member A. I think she is trying to negotiate the highest price for her shares possible.
My question is: Should I wait until she gets through Massachusetts probate to engage with her, or is Vermont court enough?
Ok! Did you need to tell me anything else? If not, I can start with answering your question.
Ready.
Ok! I've been working on an answer while we've been chatting, so it'll just be a moment.
If your LLC operating agreement requires the approval of the remaining member before a transfer of interest, then the sister does not automatically step into her brother’s place as a member.
The Vermont letters testamentary give her authority over the estate, but Massachusetts probate may still be necessary to validate any transfer of the LLC interest, especially since the LLC is formed there. You don’t have to wait for Massachusetts probate to talk with her, but you should not treat her as a member or negotiate a buyout until all legal authority is properly established under Massachusetts law.
For now, you can acknowledge her as the estate representative but retain your rights under the operating agreement. Does that help clarify things? I want to make sure I didn’t leave anything out.
Thank you very much.
For sure! Did I thoroughly address your question? Did I provide top-tier service to you? If the answer is no to either, please let me know so I can help!
All set!
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