Short answer
Generally no — a last will cannot unilaterally override an LLC operating agreement under Kentucky law. A will can transfer whatever property rights the decedent actually owned, but those rights remain subject to the LLC’s governing documents and any statutory rules. In practice, that means a will can often pass a deceased member’s economic interest (the right to receive distributions), but it usually cannot force the company or other members to admit a new full member if the operating agreement limits transfers or requires consent.
How this works in plain language
An operating agreement is a contract among the members of a limited liability company. It typically controls who may own membership interests, how interests transfer, and how to admit new members. A will is a legally effective way to name beneficiaries for property you own when you die, but it cannot break a contract you already entered into while alive.
So if your LLC’s operating agreement says members may not transfer their membership interests without majority consent, or it gives the company a right of first refusal or a buyout formula, those rules still apply after your death. The person named in your will may end up with the decedent’s distributive (economic) rights but not automatically become a voting or management member unless the LLC’s admission rules are followed.
Key legal points under Kentucky law
- Operating agreement controls member rights: An operating agreement is enforceable among the LLC’s members and usually governs transfers and admission of new members.
- Wills convey what the decedent owned, subject to contracts: A will transfers property rights the decedent had at death but cannot change contractual limitations that existed while the decedent was alive.
- Economic interest vs. membership status: Many LLC regimes (including Kentucky’s statutory framework and typical operating agreements) distinguish an assignable economic interest from the right to be a member. An assignee can often receive distributions but usually cannot vote or manage the LLC unless members accept the assignee as a new member.
- Probate required to effect transfer: The will must be probated and the executor must follow the operating agreement’s procedures and any statutory notice requirements before any membership changes are effective.
Practical examples
Example 1 — Transfer restricted by agreement: If the operating agreement contains a right of first refusal that requires remaining members to be offered the interest first, the executor must follow that procedure. The named beneficiary in the will may receive money if the members buy the interest, or they may become an assignee only if the members consent.
Example 2 — No transfer restriction: If the operating agreement allows unrestricted transfer and admits assignees or new members without special requirements, a will that leaves your LLC interest to your son could result in your son becoming a full member (subject to probate and any filing requirements).
What to check right away
- Locate and read the operating agreement. Look for sections titled “transfer,” “assignment,” “right of first refusal,” “buy-sell,” “admission of new members,” and “death of a member.”
- Check whether the operating agreement distinguishes between economic (distribution) rights and membership (voting/management) rights.
- Determine whether the agreement sets a valuation method or buyout formula for a deceased member’s interest.
- Confirm whether the company or members must approve any transferee to become a member.
Steps an executor or beneficiary should take
- Probate the will in the appropriate Kentucky probate court so the executor has legal authority to act.
- Provide the LLC with the decedent’s death certificate and the executor’s letters of office or other proof of authority.
- Notify the LLC and follow the operating agreement’s transfer or buyout procedures (including any notice and timing requirements).
- Resolve valuation and payment according to the operating agreement (or by negotiation or court order if the agreement lacks a formula).
- If admission as a member is desired, seek consent from the LLC/members per the agreement. If consent is refused, consider whether the assignee’s economic rights are acceptable or pursue negotiation or litigation as a last resort.
Estate planning options to avoid this problem
- Amend the operating agreement while alive to allow your chosen heir to succeed to membership automatically.
- Use a buy-sell agreement or cross-purchase agreement that specifies what happens on death.
- Transfer your interest during life (sale or gift) or place your LLC interest into a revocable trust that names a successor trustee to manage the interest according to your wishes.
- Draft a will carefully: describe whether you intend to pass only the economic interest or full membership and coordinate the will with the operating agreement.
How Kentucky law ties in
Kentucky’s statutory framework treats operating agreements and member contracts as controlling documents for LLC governance. For starters, consult the Kentucky Revised Statutes regarding limited liability companies and probate practice through the Kentucky Legislature site for the official text of the statutes: Kentucky Revised Statutes (search). For business filing and LLC information you can also consult the Kentucky Secretary of State’s business services pages: Kentucky Secretary of State — Business & Licensing. For guidance on probate processes in Kentucky, see: Kentucky Court of Justice.
When to consult an attorney
Talk to a Kentucky attorney if any of these apply:
- The operating agreement is unclear about transfers at death.
- Your beneficiary wants to be admitted as a member but the other members object.
- Valuation or buyout disputes arise.
- Quick action is needed to preserve business value or to comply with buy-sell timing provisions.
An attorney can review the operating agreement, the will, and Kentucky probate procedures, advise about whether your beneficiary will be an assignee or a member, and help draft amendments or settlement documents if necessary.
Documents to have ready before meeting an attorney
- Operating agreement and any amendments.
- Certificate of formation/Articles of Organization.
- Company membership ledger and capital account statements.
- Last will and testament and any trusts.
- Death certificate (when applicable) and letters testamentary/letters of administration.
Helpful hints
- Do not assume a will automatically gives full control of an LLC interest to a beneficiary—read the operating agreement first.
- If you want a specific person to step into your role in the business at death, plan ahead: amend the operating agreement or use trust planning to make admission automatic.
- Keep your operating agreement and estate documents together and tell your executor where to find them.
- If the operating agreement includes a buyout price formula, using it can avoid appraisal fights and costly litigation.
- Communicate with co-members about succession planning while you’re alive to reduce surprises for your family.