In Nevada, LLC Membership May Survive The Grave

The California Revised Uniform Limited Liability Company Act (RULLCA) provides that when a member who is an individual dies, the member dissociates from the limited liability company.  Cal. Corp. Code § 17706.02(f).  Dissociation results in the following consequences:

  • The member’s right to vote or participate as a member in the management and conduct of the LLC’s activities terminates.
  • If the limited liability company is member-managed, the member’ s fiduciary duties as a member end with regard to matters arising and events occurring after the person’s dissociation.
  • Subject to Section 17705.04 and Article 10 (commencing with Section 17710.01), any transferable interest owned by the member immediately before dissociation in the member’s capacity as a member is owned by the member solely as a transferee.
  • A person’s dissociation as a member of a limited liability company does not of itself discharge the person from any debt, obligation, or other liability to the limited liability company or the other members that the person incurred while a member.
  • The member’s executor, administrator, or other legal representative may exercise all of the member’s rights for the purpose of settling the member’s estate or administering the member’s property, including any power the member had under the articles of organization or an operating agreement to give a transferee the right to become a member.

Corp. Code § 17706.03. See What Happens When An LLC Member Dies?

The same is not true for a Nevada LLC.  NRS 86.491(4) provides that except as otherwise provided in NRS 86.491, the articles of organization or the operating agreement, the death of a member, including, without limitation, a sole member, does not:

  •  Terminate the status of the person as a member; or
  • Cause the limited-liability company, or the series of the company with which the member is associated, to be dissolved or its affairs to be wound up.

The Nevada statute further provides that except as otherwise provided in the articles of organization or operating agreement, upon the death of a natural person who is the sole member of a limited-liability company or the sole member associated with a series, the status of the member, including the member’s interest, may pass to the heirs, successors and assigns of the member by will or applicable law.  The heir, successor or assign of the member’s interest becomes a substituted member pursuant to NRS 86.351, subject to administration as provided by applicable law, without the permission or consent of the heirs, successors or assigns or those administering the estate of the deceased member.