Short answer
No. In California a will generally cannot unilaterally override a business’s governing documents. If your company (for example, an LLC) has an operating agreement that controls what happens to membership interests at your death, those contract terms usually govern. A will may operate on whatever portion of your ownership interest you actually have the legal right to transfer, but it cannot cancel or ignore valid transfer restrictions, buy‑sell rules, or consent requirements contained in the operating agreement.
Detailed answer — how this works under California law
Start with two separate legal sources:
- The company’s governing documents (for an LLC, the operating agreement and the California LLC statutes in the Corporations Code).
- Your estate plan (your will, any trusts, beneficiary designations, and California Probate Code rules that govern wills and distribution of probate assets).
Which controls? Contract terms usually control the ownership and transfer of business interests. When owners sign an operating agreement, they create contractual rules about transfer, death, and who may become a member. California law enforces such agreements unless they violate law or public policy. For general information about California’s LLC law, see the California Corporations Code (Division 3) and resources at the California Secretary of State:
Common operating agreement provisions that matter:
- Transfer restrictions: many agreements prohibit transfers without consent or convert an attempted transfer into an economic interest only (no voting or management rights for the transferee).
- Right of first refusal (ROFR) or buy‑sell: the company or remaining members may have the right to buy the departing member’s interest at a specified valuation.
- Death provisions: some agreements explicitly state what happens on a member’s death—e.g., immediate redemption, mandatory sale to the company, or passing of only economic rights to heirs.
- Admission of new members: the agreement may require existing members’ consent before the decedent’s heir becomes a full member.
How a will interacts with those provisions:
- If the operating agreement says the company will purchase your interest at death, a will that attempts to leave the full membership interest to your son cannot force the company to accept him as a member. At most, your estate (and therefore your heirs) might receive the purchase price or an economic interest.
- If the agreement allows assignment of the economic rights but requires consent to full membership, your son may inherit the economic benefits (distributions) but not management rights unless the members consent.
- If the operating agreement is silent about death and transfers, California’s default LLC rules apply. Those default rules may allow a transferee to receive only the member’s transferable interest (often economic rights) and not become a member without approval.
Probate and wills do not override contract. California’s Probate Code governs wills and estate administration, but it cannot be used to nullify a valid contract term in the operating agreement. For general Probate Code resources see:
Practical example (hypothetical): If you own 40% of an LLC and your operating agreement says on your death the LLC has the option to buy your interest, your will leaving “my LLC interest to my son” will not force the company to make him a member. The estate might receive the buyout value. If no buyout clause exists but the agreement requires member consent for admission, your son may only receive the economic interest until the other members vote to admit him.
Bottom line: a will can direct how you want your estate to distribute assets you lawfully own, but it cannot override the contractual rules you already agreed to for the business. To ensure your business interest passes as you want, plan jointly with the operating agreement and estate documents.
What you should do next
- Pull the operating agreement and read the death, transfer, ROFR, buy‑sell, and admission clauses.
- Review any membership certificates, buy‑sell valuations, and insurance (life insurance often funds buy‑sell buyouts).
- Check whether your LLC allows transfer‑on‑death designations or whether a trust could own the interest and permit smoother succession.
- If you want your son to step into ownership and management, consider amending the operating agreement now (with required consents) or negotiating a change with the other members.
- Talk with an attorney experienced in California business and estate law to draft coordinated business succession planning documents (amendments, buy‑sell agreements, or business succession trust) and to update your will or trust accordingly.
Helpful Hints
- Do not assume “inheritance” equals “membership.” Verify whether your heir will receive voting and management rights or just economic benefits.
- Amending the operating agreement during your lifetime is the most reliable way to guarantee your desired outcome.
- Buy‑sell agreements should specify valuation method and funding (life insurance or company cash) so heirs are not left with illiquid, unwanted equity.
- If you own business interests in more than one entity (LLC, corporation, partnership), check each entity’s governing documents—rules differ by entity type.
- Keep your estate documents (will, trust) and business documents consistent; contradictions create delays and added cost for your heirs.