LLC member can be a trust?

Asked almost 4 years ago - Norwalk, CA

I have a LLC with 2 other members. I want to trade my membership to my me and my wife's living trust. The other members have no issue with it.

Do we have to change the original operating agreement because that shows my own name even though we will substitute the trust?

Or is a written agreement among us three current members could enough to do the trade?

Attorney answers (3)

  1. Steven Alan Fink

    Contributor Level 20

    Answered . Written agreement signed by all members approving transfer of ownership as per the Operating Agreement requirements for transfer should be sufficient.

    The response given is not intended to create, nor does it create an ongoing duty to respond to questions. The response does not form an attorney-client relationship, nor is it intended to be anything other than the educated opinion of the author. It should not be relied upon as legal advice. The response given is based upon the limited facts provided by the person asking the question. To the extent additional or different facts exist, the response might possibly change. Attorney is licensed to practice law only in the State of California. Responses are based solely on California law unless stated otherwise.

  2. Dana Howard Shultz

    Contributor Level 20

    Answered . A trust can be a member of an LLC.

    The formalities that are required for the transfer should be specified in the section of the Operating Agreement that governs assignment of membership interests.

    If the OA does not have such a section, then (a) you might find the post at the link below informative and (b) you should consider having an attorney amend the OA so it will better meet your needs in the future.

    Disclaimer: This post does not constitute legal advice and does not establish an attorney-client relationship.

  3. Steven J. Fromm

    Contributor Level 20

    Answered . This can be done, but you should discuss the estate, income and social security tax implications and perhaps payroll tax implications of such a transfer with an estates and/or tax attorney. Just one example: If you are working at the LLC and the K-1 goes to the living trust, who is responsible for the social security taxes? The trust or you?

    Hope this helps. If you think this post was helpful, please check the thumbs up (helpful) tab below. Thanks.
    LEGAL DISCLAIMER
    Mr. Fromm is licensed to practice law in PA with offices in Philadelphia and Montgomery Counties in the state of Pennsylvania. He phone number is 215-735-2336 and his email address is listed below.
    Mr. Fromm is ethically required to state that the response herein is not legal advice and does not create an attorney/ client relationship. Also, there are no recognized legal specialties under Pennsylvania law. Any references to a trust, estate or tax lawyer refer only to the fact that Mr. Fromm limits his practice to these areas of the law. These responses are only in the form of legal education and are intended to only provide general information about the matter within the question. Oftentimes the question does not include significant and important facts and timelines that if known could significantly change the reply or make such reply unsuitable. Mr. Fromm strongly advises the questioner to confer with an attorney in their state in order to ensure proper advice is received.
    By using this site you understand and agree that there is no attorney client relationship or confidentiality between you and the attorney responding. This site should not be used as a substitute for competent legal advice from a licensed attorney that practices in the subject area in your jurisdiction, who is familiar with your specific facts and all of the circumstances and with whom you have an attorney client relationship. The law changes frequently and varies from jurisdiction to jurisdiction. The information and materials provided are general in nature, and may not apply to a specific factual or legal circumstance described in the question or omitted from the question.
    Circular 230 Disclaimer - Any information in this comment may not be used to eliminate or reduce penalties by the IRS or any other governmental agency.

Can't find what you're looking for? Ask a Lawyer

Get free answers from experienced attorneys.

 

Ask now

29,993 answers this week

3,072 attorneys answering

Ask a Lawyer

Get answers from top-rated lawyers.

  • It's FREE
  • It's easy
  • It's anonymous

29,993 answers this week

3,072 attorneys answering