By Tiffani K. Thornton, Esq., Associate Attorney
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July 21, 2022
With the rise in popularity of the Florida Limited Liability Company or “LLC”, many people have become familiar with its separation from the Managers or Members, and specifically that it keeps living even if those managers or members are dead. The information gap is many people do not know exactly how this works. Your ownership of an LLC, whether it is 100% or 10% is an “interest”. Some people call this your “stake in the business”, “piece of the pie”, or other colloquialisms. Unless there is a properly drafted agreement to the contrary, when you die this ownership will go to whomever is listed in your Last Will and Testament, or according to the Florida Statutes if you do not have a will. It may go entirely to one person, such as your spouse, or may be divided among multiple persons. For example, if you die without a Will and have a spouse with children in common, the interest will go to your spouse. However, if you die without a will, with two children and no spouse, your children will each have a 50% interest in the LLC. Their ownership is formalized during the probate process and an update with the Division of State is completed to finalize the change of ownership. This is unlikely to be a desirable outcome, but thankfully with careful planning there are alternatives such as the following: 1) Creating or revising your operating agreement to state who receives your interest at death, if other members will automatically receive or purchase your interest; 2) Drafting a Last Will and Testament that specifically states which of your heirs should receive the ownership interest; and 3) Creating a Revocable Living Trust that will allocate assets to your heirs upon death and during your lifetime, transfer your ownership interest into the trust. To discuss these options in more detail, contact one of our attorneys at Martinez Law, P.A., (813)803-4887, admin@martinezlawfla.com.