Detailed answer — how Alaska law treats an LLC interest after a member dies

When a member of a limited liability company (LLC) dies in Alaska, two different legal paths determine who gets what: (1) the LLC’s own governing documents (the operating agreement and articles) and (2) state default rules that apply when the operating agreement is silent. Start by locating the operating agreement — it controls if it includes clear provisions. If it does not address death, Alaska’s LLC rules and general probate law will fill the gaps.

1. The operating agreement controls if it says something

Many operating agreements contain specific provisions about what happens when a member dies: whether the deceased member’s interest is (a) redeemed (b) purchased by the remaining members, (c) transferred automatically to a transferee who becomes a full member, or (d) treated as only an economic interest for the estate or heirs. If the operating agreement contains clear buy‑sell, transfer‑restriction, or admission procedures, follow those provisions.

2. If the operating agreement is silent, state law and probate rules apply

If the operating agreement doesn’t address death, the deceased person’s membership interest becomes part of their estate. That means the decedent’s will or Alaska’s intestacy laws determine who inherits whatever interest the decedent owned. However, inheriting the deceased member’s interest does not always mean the heir automatically becomes a full member with management and voting rights.

3. Economic rights vs. management rights

Under typical LLC default rules (adopted in many states and reflected in Alaska practice), a transferee who receives a deceased member’s interest through probate generally gets only the economic rights — the right to receive distributions and allocations of profits or losses that would have gone to the decedent. The transferee usually does not automatically gain membership rights such as voting or management unless the other members consent or the LLC’s governing documents provide otherwise. In practice this means the estate or heir can receive money distributed by the LLC but may not participate in LLC meetings or decision making without membership admission.

4. Probate and transfer logistics

The deceased member’s estate representative (personal representative or executor) should:

• Locate the operating agreement and any amendments.
• Notify the LLC and provide a certified copy of the death certificate.
• Determine whether the operating agreement has buy‑out or transfer restrictions, or a valuation formula for interests.
• Determine whether the LLC’s articles or state law require member consent for a transferee to become a member.
• If necessary, open a probate estate in Alaska so the court can approve transfers under the will or intestacy rules.

5. Common outcomes when the operating agreement is silent

Typical possibilities when the operating agreement doesn’t address death:

• The estate/beneficiaries receive only a transferable economic interest (right to distributions) but not management or voting rights.
• The LLC or remaining members may have the right to require redemption (buying out the deceased member’s economic interest) under a buy‑out or implied consent rule.
• The estate may need to obtain member approval to convert the transferee into a full member.
• If no one acts, the estate may hold an asset (the economic interest) subject to valuation and possible sale in probate.

6. Practical consequences for families and estates

Because heirs often expect to “inherit” and run a business, the difference between economic and management rights matters. If heirs cannot immediately participate in management, the business continues under existing members’ control while the estate receives distributions. That can create tension or liquidity needs (heirs who need cash may force a sale or press for a buy‑out).

7. What to do next (recommended steps)

1. Find and read the operating agreement and the articles of organization.
2. Obtain certified copies of the death certificate and notify the LLC in writing.
3. Check for transfer restrictions, buy‑sell clauses, valuation methods, or member admission rules.
4. Contact the LLC’s accountant to determine tax consequences and distribution history.
5. Open probate if needed so the estate can transfer the decedent’s interest or receive distributions.
6. Consider mediation with other members if there is a dispute about rights or valuation.
7. Consult an attorney experienced in Alaska LLC and probate law to protect estate and heir interests.

For general information about Alaska business filings and LLCs see the Alaska Division of Corporations, Business and Professional Licensing: https://www.commerce.alaska.gov/web/cbpl/. For legislative text and to review Alaska statutes, visit the Alaska State Legislature website: https://www.akleg.gov/.

Note on statutes: Alaska’s statutory scheme and case law provide default rules and procedures that apply when an operating agreement is silent. If you need specific statutory citations or application to a particular fact pattern, an Alaska attorney can identify and cite the exact provisions and cases that apply to your situation.

Helpful Hints

• Find the original operating agreement first — it often answers the question directly.
• Ask whether the operating agreement requires member consent to admit a new member; if so, heirs may only get distributions until consent is given.
• Keep a certified copy of the death certificate handy when communicating with the LLC or filing probate papers.
• If you’re an heir who wants control, be prepared to negotiate a buy‑in price or wait for member approval.
• If you’re a remaining member, consider whether the LLC should buy out the estate to avoid outside parties entering the business.
• Document all communications with the LLC and other members in writing.
• Consider updating your own estate plan and the LLC operating agreement to avoid similar uncertainty in the future (e.g., add buy‑sell terms financed by life insurance).
• Tax points: an estate’s receipt of an economic interest can have tax consequences; involve the LLC’s accountant or a tax professional.
• If the operating agreement lacks guidance, get legal help early — small differences in wording can change outcomes in probate or transfer disputes.