Estate Administration Problems When LLC Operating Agreements Unclear

It is important for an LLC’s operating agreement to clearly and carefully detail what is allowed and what is to happen upon the death, disability, or legal incompetency of a member. If an LLC’s operating agreement does not address whether a member can gift or bequest economic or membership interests, the state’s default rules will fill the gap. However, state laws regarding LLCs are not uniform and many states have fallen behind legal developments in amending the statutes.

See Seymour Goldberg, Operating Agreement Headaches Involving Limited Liability Companies, Accounting Today, March 18, 2015.