What Business Owners Need to Know
By Hampton & Hampton LLP – Business Succession and Estate Planning Attorneys in Alpharetta and Metro Atlanta
Many Georgia business owners have a false sense of security in their LLC operating agreement. They believe it will keep their company out of probate when they pass away. The reality is very different: an operating agreement alone does not transfer legal ownership. Without additional planning, your business interest can still be tied up in court.
At Hampton & Hampton LLP, we see this misunderstanding often. Entrepreneurs across Atlanta, Alpharetta, and nearby communities are surprised to learn that operating agreements must be coordinated with trusts, buy-sell agreements, or other estate planning tools to protect both family and business.
What Happens to an LLC Interest at Death in Georgia
Under Georgia law, a membership interest in an LLC is considered personal property. If it is titled in your name alone, it will pass through probate—even if your operating agreement names a successor. That means the probate court oversees the transfer, which can slow business decisions and restrict access to accounts.
See how we support families through probate and estate planning that safeguard both personal and business assets.
Why the Operating Agreement Isn’t Enough
An operating agreement outlines management and succession preferences, but it does not move legal title. Without proper estate planning, successors have no immediate authority to act, and ordinary operations can be delayed.
This is one of the most common misunderstandings we encounter in our business succession planning work with Georgia business owners.
How to Keep Your Business Out of Probate
To ensure your company runs smoothly, your estate plan and operating agreement need to be aligned. Here are the tools we often recommend:
Revocable Living Trust
Your trust can hold the LLC interest and direct who takes over, keeping the transfer private and outside probate. The operating agreement must allow trust ownership.
Buy-Sell Agreement
For multi-member LLCs, a buy-sell agreement ensures the business or other members purchase your interest, keeping control in the company while providing funds to your estate.
Coordinated Operating Agreement
It should permit trusts as members, clarify management rights, and work hand-in-hand with your will and trust.
Learn more about how our trust planning services can be structured to match your business goals.
The Risk of Relying on an Operating Agreement Alone
When ownership is not transferred correctly, probate creates challenges such as:
- Delays in payroll or vendor payments
- Uncertainty for employees and partners
- Family disputes over business control
- Risk of a forced sale or decline in value
The document may give the appearance of a clear plan, but without estate planning in place, the business can still be tied up in court. In Georgia, even a carefully drafted operating agreement cannot bypass probate unless it is paired with tools like a revocable trust or a buy-sell agreement..
Protecting Both Your Legacy and Your Business
At Hampton & Hampton LLP, we help Georgia business owners build succession plans that:
- Keep ownership out of probate
- Align operating agreements with long-term goals
- Create buy-sell agreements funded efficiently
- Provide continuity for employees, partners, and family
Serving Atlanta, Alpharetta, Sandy Springs, Roswell, Johns Creek, and Milton
Don’t put this off, contact Hampton and Hampton today to protect your Georgia business from probate delays.
Frequently Asked Questions
Does an operating agreement keep an LLC out of probate in Georgia?
No. An operating agreement guides how members want the business managed, but it does not transfer legal title. To avoid probate, best practice is to hold the LLC interest in a revocable living trust or use a buy-sell agreement.
What is the best way for Georgia business owners to avoid probate on an LLC?
The strongest approach is to transfer your LLC interest into a revocable living trust and make sure your operating agreement permits trusts as members. If the LLC has more than one owner, adding a buy-sell agreement keeps ownership within the business while ensuring your estate receives fair value.
What happens if my LLC interest goes through probate?
Probate puts the court in charge of the transfer. That can delay payroll, restrict access to accounts, and create disputes among heirs or co-owners. These disruptions can weaken the company’s stability and, in some cases, lead to a forced sale at a reduced value.
Why should my operating agreement and estate plan be coordinated?
An operating agreement and estate plan only work if they match. Conflicting provisions can cause confusion, delay, or even litigation. Coordinating them ensures authority transfers smoothly, avoids disputes, and protects both family and business continuity.