What Happens When a Member of a Limited Liability Company Dies in Florida?


In the state of Florida, the law provides guidance of how a Limited Liability Company (LLC) should govern itself when one of the members/shareholders dies. Because of the growing popularity of the business entity in the state of Florida, particularly in Miami, a growing business area, the law on LLCs has become expansive to ensure that the rights of the owners and of the entity itself are preserved. 

What happens when an owner of an LLC dies?

LLCs are business entities that are used, sometimes, by individuals to separate personal property and assets from the liability of the business or trade that they carry out. This is primarily why LLCs have become popular amongst people who choose to have single member LLCs to protect themselves from liability, however, it raises the question of what happens when that person or owner dies. In Florida, if the member/owner of the single member LLC did not have an operating agreement that specified how the ownership or membership rights of the LLC are to be transferred after the death of the member then it could very well mean the dissolution of the LLC. However, in the case of there being an operating agreement that details the inheritance of the membership rights/shares of the LLC to the original owner’s heirs then the LLC may continue to exist. 

How does an LLC member’s death affect a multi-member LLC? 

Multi-member LLCs are different from single member LLCs in the fact that they are owned by more than one person. It can be a kind of partnership or it can hold dozens or hundreds of shareholders/members. In the case of a multi-member LLC that has two members with one member having the majority 51% or more holding of the LLC the law provides guidance as to what happens when that member dies. Florida law provides that in a multi-member LLC when a member dies there are two ways in which the shares of that member can be distributed. The first is if the members have an operating agreement that demonstrates the ownership rights of the members were held with rights of survivorship, meaning that the other members have the right to incorporate the deceased member’s shares into their own. However, in the cases where an operating agreement is not executed or it does not specify if the members have rights of survivorship, the holdings of the deceased member become part of their estate and must go through the probate process. 

Should the deceased member not have had a will dictating who would inherit the shares of the LLC, the shares will become part of the estate of that person to then be decided through probate who will inherit the shares. As part of the estate, the personal representative of the estate can determine if the shares may be bought off by the other members to retain control of the LLC or if the shares will be inherited by the heirs of the deceased member. Essentially, the death of a member of an LLC can become a complex issue when an operating agreement is not in place to provide clarity on how the LLC shares or its operations will continue should one of the members die. Operating agreements serve a great purpose of protecting LLCs from legal disputes and can shine clarity on how to resolve disputes should they arise and is a great example of why those with an LLC or interested in starting one should consider having one made.

EPGD Business Law is located in beautiful Coral Gables, West Palm Beach and historic Washington D.C. Call us at (786) 837-6787, or contact us through the website to schedule a consultation.

*Disclaimer: this blog post is not intended to be legal advice. We highly recommend speaking to an attorney if you have any legal concerns. Contacting us through our website does not establish an attorney-client relationship.*

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