Question: I am the sole member of my California limited liability company. I am not married and have two children. What happens to my California LLC if I were to die?
Answer: California RULLCA Section 17704.01 provides:
A limited liability company is dissolved, and its activities shall be wound up, upon . . . The passage of 90 consecutive days during which the limited liability company has no members, except on the death of a natural person who is the sole member of a limited liability company, the status of the member, including a membership interest, may pass to the heirs, successors, and assigns of the member by will or applicable law.
Based on this statute the good news is that the single member CA LLC does not automatically dissolve if the membership interest of the deceased sole member is inherited by the heirs of the deceased by a Will or the law of intestate succession. If the deceased member has a valid Will then the membership interest will pass to the heir(s) named in the Will. If there is no Will then the membership interest will go to the heirs according to the law of intestate succession of the state in which the deceased member resided at the time of death.
Warning: The membership interest of a deceased member who was a California resident may have to go through an expensive and lengthy California probate. To learn about the costs of a California probate and how to save your family thousands of dollars by avoiding a California probate read “Trusts Should Own Valuable LLCs to Avoid Probate.”