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Missouri: What Happens to an LLC Member's Share When They Die

What happens if an LLC operating agreement doesn’t address transfer of a member’s share at death?

Short answer

If an LLC operating agreement in Missouri is silent about what happens when a member dies, state default rules generally allow the decedent’s estate or heirs to receive the economic value of the membership interest (distributions and allocations). However, the heir or estate typically does NOT automatically receive the deceased member’s management, voting, or other membership rights unless the remaining members admit them as a member or the operating agreement or an applicable statute says otherwise. In practice this means the estate can collect money due to the decedent but usually cannot run the business or vote on company matters without approval.

Detailed answer under Missouri law

Missouri’s limited liability company law (the Missouri LLC Act, Chapter 347 of the Revised Statutes of Missouri) provides the framework commonly used when an operating agreement is silent. The basic concepts that apply in Missouri mirror the Uniform Limited Liability Company Act used in many states:

  • Transferable (economic) interest: A deceased member’s transferable interest—the right to distributions and the economic benefits tied to the member’s ownership—usually becomes part of the member’s estate. The personal representative or heirs can collect distributions that would otherwise be paid to the decedent.
  • Membership rights remain restricted: Management and voting rights (the right to participate in control of the LLC) generally do not pass automatically to the decedent’s personal representative or heirs. Those rights require the remaining members’ consent or a specific admission process set out in the operating agreement or statute.
  • Estate as transferee by default: The estate or heirs can be treated as transferees of the economic interest, meaning they receive money but are not active members unless the LLC admits them as members.

For Missouri’s full statutory framework for LLCs, see Chapter 347 of the Revised Statutes of Missouri: https://revisor.mo.gov/main/Chapters/Chapter347/Chapter347TOC.html. That chapter sets the default rules that apply when an operating agreement does not address membership transfer on death.

Because operating agreements often contain buy-sell clauses, admission rules, or restrictions on transfers, silence in the operating agreement triggers these statutory defaults. If the agreement does not say anything, expect the estate to be able to receive distributions but not to step into the deceased member’s governance role without approval from the other members.

Practical consequences for the business and the estate

  • Business continuity: The LLC usually continues under the remaining members’ governance. Death alone typically does not dissolve the LLC.
  • Access to distributions: The estate can receive unpaid distributions and future distributions attributable to the decedent’s economic interest, subject to any distribution restrictions in the operating agreement or the company’s financial condition.
  • Management and control: The estate or heirs normally cannot make management decisions, access member-only records, or vote on company matters unless the LLC consents to admit them as members.
  • Buyouts and valuation: Remaining members may have the option (or right) to buy the decedent’s economic interest. If the operating agreement is silent, the estate may negotiate a buyout based on fair market value or follow any statutory valuation rules that apply.

Immediate steps to take if a member dies and the operating agreement is silent

  1. Locate the operating agreement and Articles of Organization. Even a short clause can control what happens.
  2. Gather estate documents: death certificate, will, trust documents, and letters testamentary or letters of administration from probate court.
  3. Notify the LLC’s manager(s) or members in writing and request information on distributions, capital accounts, and any pending member actions.
  4. Request the LLC’s membership ledger and recent financial statements to determine the decedent’s allocation and distribution rights.
  5. Discuss valuation and buyout options with the LLC or, if necessary, obtain a business valuation from a qualified professional.
  6. If members dispute admission or buyout terms, consider mediation or legal representation—especially if the estate needs access to cash or the deceased member’s family wishes to participate in management.

How to prevent uncertainty in the future (for LLC members)

Members can avoid ambiguity by updating the operating agreement and coordinating estate planning:

  • Add a clear buy-sell or succession clause that details valuation, timing, and funding (such as life insurance buyouts).
  • State whether a transferee by succession may be admitted as a member, and if so, set objective admission criteria.
  • Include right-of-first-refusal and transfer restriction provisions to control who can acquire membership rights.
  • Coordinate personal estate planning (wills and revocable trusts) with the LLC’s terms so that beneficiaries know whether they inherit economic rights only or full membership.

When to consult an attorney

Talk to a Missouri business or probate attorney if any of the following apply:

  • The LLC operating agreement is silent or ambiguous about succession.
  • Family members or heirs want to be admitted as members but other members object.
  • There’s a dispute about valuation or a buyout price.
  • The estate needs distributions to pay debts, taxes, or expenses.
  • Probate or trust administration is required to transfer economic interests.

An attorney can explain how Missouri’s LLC statutes (Chapter 347) apply to the specific facts and can draft or amend documents to reflect the members’ intentions going forward. See Missouri LLC Act: https://revisor.mo.gov/main/Chapters/Chapter347/Chapter347TOC.html

Helpful Hints

  • Check the operating agreement first—many disputes resolve there.
  • Obtain letters testamentary or letters of administration to show authority to act for the estate.
  • Preserve business records and recent financials—valuations hinge on good documents.
  • Consider life insurance-funded buyouts to provide liquidity to an estate and a clean ownership transition.
  • If the LLC has managers, the manager’s authority may continue to run the business; confirm scope in writing.
  • Document all communications with other members—dates, attendees, and decisions—to avoid later disputes.
  • If the estate needs money to pay taxes or debts, ask the LLC about interim distributions or loans while valuation and probate proceed.

Resources

Missouri Revised Statutes, Chapter 347 (Limited Liability Companies): https://revisor.mo.gov/main/Chapters/Chapter347/Chapter347TOC.html

Disclaimer: This article explains general principles under Missouri law and is for educational purposes only. It is not legal advice. For a definitive interpretation of how the law applies to your situation, consult a licensed Missouri attorney who can review your operating agreement and the relevant facts.

The information on this site is for general informational purposes only, may be outdated, and is not legal advice; do not rely on it without consulting your own attorney.