By Hampton & Hampton LLP – Serving Atlanta, Alpharetta, and Surrounding Georgia Communities
What really happens to your Atlanta business if you die or become incapacitated? Many Georgia owners mistakenly believe that naming a successor in the operating agreement is sufficient. It’s not. Under Georgia law, an LLC interest is personal property, not a management right (O.C.G.A. §14-11-501).
Without a trust, your company can end up in probate, your family may have no authority to run it, and years of hard work can suddenly be at risk. That’s why more business owners in Atlanta, Alpharetta, Roswell, and Johns Creek are placing their companies into trusts for smooth, private succession.
Does an Operating Agreement Protect Against Probate in Georgia?
No, an operating agreement governs how your LLC is managed while you’re alive, but it doesn’t control what happens to your ownership after death.
Under Georgia law, an LLC interest is considered personal property. When a member dies, their heirs don’t automatically inherit ownership or management rights. Instead, they are treated as assignees—entitled only to profits unless every other member unanimously agrees to admit them as a full member (O.C.G.A. §§ 14-11-503, 505).
That creates a real risk for families and co-owners. Heirs may be locked out of management decisions for months, while competitors, creditors, or even disgruntled partners exploit the gap. In some cases, the business itself can lose contracts or clients because no one has clear authority to act.
In Fulton County, probate usually lasts six to twelve months, and because it’s public, every detail of your estate—including your business—becomes part of the record. During that time, your company could stall or even fracture without clear authority in place.
Placing your business interest into a trust changes that outcome. Your successor trustee can step in immediately, avoiding probate altogether and keeping the transfer private.
Here’s a side-by-side look at how trusts and operating agreements differ for Georgia business owners:
As the table shows, operating agreements govern management during life, but a trust ensures that your Georgia business avoids probate and transfers smoothly at death or in the event of incapacity.
Can a Trust Own an LLC in Georgia?
Yes, it can—and in many cases, it should. Georgia law allows you to assign your LLC membership interest to a trust, making the trust (through the trustee) the legal owner. That assignment keeps your company out of probate and ensures there’s no gap in management if something happens to you.
Here’s why it matters: if your LLC stays in your personal name, your interest is treated as part of your probate estate. In Fulton County, that means your business could be tied up in court for months before your heirs see a dime—or worse, before anyone has authority to run it. By transferring the membership interest into your trust, your successor trustee steps in immediately.
For Atlanta business owners—whether you’re running a family-owned LLC in Roswell, a franchise in Alpharetta, or a professional practice in Sandy Springs—that one step can mean the difference between smooth continuity and costly disruption.
Explore how Hampton & Hampton guides Georgia families through estate planning here.
What Georgia Business Owners Should Know About S-Corps and Trusts
If your company is taxed as an S-Corporation, trust planning gets more complicated. While a revocable living trust can own S-Corp stock during your lifetime, things change at death. Under federal law, that trust only remains a qualified shareholder for two years after the grantor dies (26 U.S.C. § 1361(c)(2)(A)(ii)).
If nothing is done within that window, your S-Corp status can be lost—and with it, major tax advantages. The fix is to elect one of two options:
- A Qualified Subchapter S Trust (QSST), where one beneficiary receives the income, or
- An Electing Small Business Trust (ESBT), which can accommodate multiple beneficiaries but has stricter tax rules.
For Georgia owners of thriving S-Corps in Alpharetta or Johns Creek, overlooking this detail can cost far more than probate delays—it can change your entire tax picture. A trust drafted with the right IRS elections protects both the business and its tax status for the next generation.
Why Georgia Business Owners Place Their Business in a Trust
A trust does what your operating agreement cannot: it keeps your company out of probate, ensures continuity if you become incapacitated, and gives you—not the court—the power to decide who inherits. For Atlanta business owners, these advantages aren’t theoretical. They determine whether your company continues smoothly or stalls in Fulton County probate.
Business succession isn’t a formality; it decides if your company keeps running or gets stuck in probate. For Georgia entrepreneurs, a trust is the tool that keeps operations steady and ownership secure.
Key Benefits of Using a Trust for Your Business:
- Avoid Probate Delays: In Georgia, probate typically lasts six to twelve months and is public record. By placing your membership interest into a trust, succession happens immediately and privately.
- Plan for Incapacity: If illness or injury prevents you from managing the business, a successor trustee can step in without waiting on court approval. Operating agreements rarely provide that kind of clarity.
- Control Who Inherits: A trust allows you to set the terms: who receives the business, under what conditions, and with what protections. This is especially valuable in blended families or when shielding assets from creditors or divorce.
- Coordinate With the Rest of Your Estate: Your business is only one piece of the puzzle. A trust acts as the hub, ensuring your company, real estate, investments, and insurance all move together according to your plan.
Most Georgia owners rely on a revocable living trust for probate-free transfers and incapacity protection. Larger estates may also use advanced trusts—such as irrevocable trusts, dynasty trusts, or GRATs—for tax and asset protection. But for most small and mid-sized companies in Metro Atlanta, the revocable trust is the cornerstone of effective business succession planning.
How to Put Your Georgia Business Into a Trust
If you’re an Atlanta-area business owner, here’s the process for moving your company into a trust so it avoids probate and stays under your control:
- Review Your Operating Agreement – Most Georgia LLC and shareholder agreements only address management while you’re alive, not what happens if you die or become incapacitated.
- Assign Your Interest to a Trust – Your LLC membership interest or corporate shares can be transferred into your revocable living trust. This is the key step that keeps your business out of Fulton County probate.
- Update the Agreement to Match – Amend the operating agreement so your successor trustee’s role is recognized. Without this, Georgia’s default rules leave heirs as assignees only, without management rights.
- Plan Ahead if You’re an S-Corp – Federal law (26 U.S.C. § 1361(c)(2)(A)(ii)) gives your trust a two-year grace period after death to keep S-Corp status, so elections like QSST or ESBT may be required.
- Integrate With Your Estate Plan – Make sure your trust also coordinates with other Georgia assets like real estate, investments, and insurance.
By following these steps, business owners in Alpharetta, Roswell, Johns Creek, and across Metro Atlanta can ensure smooth, private succession without leaving their company in the hands of the probate court.
Keep Your Georgia Business Out of Probate
If your business is still in your personal name, probate will decide what happens when you die or become incapacitated. In Georgia, that means months of delays, public filings, and uncertainty over who has authority to act. A trust avoids all of that—keeping your company in operation, your wishes in force, and your family out of court.
At Hampton & Hampton LLP, we help Atlanta business owners—from Alpharetta and Roswell to Johns Creek and Sandy Springs—transfer their business interests into trusts and coordinate those plans with the rest of their estate. The result is continuity, privacy, and the peace of mind that your legacy will stay intact.