Short answer: If an LLC operating agreement does not say what happens to a member’s interest at death, Nebraska’s default LLC rules and property/probate law govern. In practice, the decedent’s estate generally inherits the economic (distribution) rights, but the estate or heir usually does not automatically get the management and voting rights of the membership unless the remaining members consent or state law/formation documents say otherwise.

This is an explanation of how that typically works in Nebraska, how the process usually unfolds, and practical next steps to protect the business and the decedent’s beneficiaries. This is educational information only and not legal advice.

Detailed answer — what the law says and how it applies

LLC law distinguishes two different things about a member’s interest:

• Transferable (economic) interest — the right to receive distributions of money or property from the LLC and payments due to the member.
• Membership (governance) rights — the right to participate in management, vote, and act as a member.

When an operating agreement is silent about death, Nebraska’s statutory and common-law rules typically treat those two categories differently:

1. Economic rights pass to the estate or beneficiaries.

   The financial value of the decedent’s membership interest (distributions and other payments) usually becomes part of the decedent’s probate estate and passes to heirs or beneficiaries under the will or intestacy rules. The new holder (executor, heir, or beneficiary) can generally collect distributions, subject to any reasonable set-off or liability of the estate to the LLC.

2. Management and voting rights usually do not transfer automatically.

   Under the standard approach used by most state LLC laws, including Nebraska’s LLC statutes and default rules, a transferee by death gets economic rights but not the automatic right to become a full member with voting and management authority. Admission as a member often requires the consent of the remaining members or compliance with the operating agreement or articles of organization.

3. Other members may have a right to buy out the decedent’s interest.

   If the operating agreement is silent, the LLC or the other members may still be able to arrange or force a buyout under state law, an LLC policy, or by negotiation. That buyout often requires an agreed valuation or a court-determined price if parties disagree.

4. Probate and estate administration matters.

   The estate representative must account for the member’s transferable interest during probate. If the LLC requires written notice of a transfer or has a restriction on transfers, the estate may need to follow those steps to receive distributions or effect a sale.

For authoritative text on how Nebraska treats limited liability companies and member interests, see Nebraska’s business filings and LLC resources at the Nebraska Secretary of State (https://sos.nebraska.gov/business-services/limited-liability-company-llc) and the Nebraska Legislature’s statutes collection for businesses (https://nebraskalegislature.gov/laws/statutes.php?chapter=21). These resources provide the statutory framework and forms used by Nebraska LLCs.

Hypothetical example: Alice and Ben form an LLC in Nebraska. Their operating agreement says nothing about death. Alice dies and leaves her property to her spouse, Casey. Under Nebraska practice, Casey (or Alice’s estate) receives Alice’s share of distributions, but Casey does not automatically step into Alice’s management role or vote on company matters unless Ben agrees to admit Casey as a member or the LLC documents permit it. Ben and Casey can negotiate a buyout of Alice’s economic interest or agree to admit Casey as a member under new terms.

Common complications and important details

• Some LLCs include a buy-sell clause or an automatic purchase upon a member’s death. If such a clause exists elsewhere (subscription agreement, buy-sell agreement), it controls.
• Creditors of the decedent can make claims against the distributions or interest during probate.
• If members disagree about admission or valuation, disputes can lead to mediation, arbitration (if agreed), or litigation. That can be slow and costly.
• Tax consequences can arise on transfer or buyout. The estate and LLC should consult tax counsel to understand income, estate, and gift tax effects.

Practical next steps for members, heirs, and personal representatives

If you face this situation in Nebraska, consider these actions:

1. Locate and read all LLC documents (operating agreement, articles of organization, subscription or buy-sell agreements).
2. Contact the LLC manager or other members to inform them of the death and discuss immediate cash flow or distribution issues.
3. If you are the executor or heir, gather documentation (death certificate, will, letters testamentary or letters of administration) that the LLC may request to recognize the estate’s claim to distributions.
4. Get a business valuation if the parties will negotiate a buyout.
5. Talk to a probate attorney about administering the decedent’s estate and enforcing or transferring the economic interest.
6. Talk to a business attorney to advise on admission, buyout mechanics, or resolving disputes among members.
7. Consider updating or creating an operating agreement that specifies what happens on death, disability, divorce, or bankruptcy to avoid future uncertainty.

Helpful hints

• Keep the original operating agreement and any amendments in a safe place and provide copies to the executor.
• Check whether the LLC files an annual report or has specific requirements regarding transfers; follow those procedures promptly.
• Consider life insurance tied to buy-sell arrangements so surviving members have funds to buy out an estate without disrupting the business.
• Document any informal agreements between members in writing and amend the operating agreement to reflect them.
• Resolve valuation methods up front in an agreement (appraisal, formula, or predetermined price) to reduce later conflict.
• When possible, handle transitions by agreement to avoid costly litigation.