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