Quick Summary
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Florida courts have ruled that an LLC’s operating agreement can override a will when it clearly defines what happens to a member’s ownership interest after death.
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The operating agreement acts as a binding contract, and its death-transfer provisions can dictate ownership succession outside of probate.
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Careful drafting is essential to avoid disputes — especially when balancing business succession, estate planning, and asset protection goals.
Introduction: Where Business and Estate Planning Collide
For many Florida business owners, an LLC is more than just a legal structure — it’s the foundation of their livelihood and a central part of their estate. But what happens when your will says one thing, and your LLC operating agreement says another about who inherits your share?
In Florida, this question isn’t hypothetical. The courts have made it clear that a properly drafted LLC operating agreement can actually override a will when it comes to transferring ownership after a member’s death.
Understanding how and why this happens can help business owners avoid unintentional conflicts — and ensure that their wishes are carried out exactly as intended.
The Legal Foundation: Why Contracts Can Outrank Wills
In Florida, a will governs how your personal property passes through probate. But an LLC operating agreement is a contract — and contracts carry their own legal weight.
When a person becomes a member of an LLC, they agree to the operating agreement’s terms. If that agreement includes a clause specifying what happens to their ownership interest upon death — such as transferring it automatically to another member, family member, or beneficiary — Florida courts typically uphold it as a binding contractual transfer, not a testamentary gift.
In other words, your LLC interest may not even enter your estate, making the will irrelevant to that particular asset.
Key Case: Blechman v. Estate of Blechman
This principle was solidified in the landmark Florida case Blechman v. Estate of Blechman (4th DCA, 2015).
In that case, an LLC’s operating agreement stated that when a member died, their interest would automatically transfer to the member’s children. However, the member’s will left his LLC interest to a different person.
When the dispute reached the court, the judges sided with the operating agreement — ruling that the contract’s terms controlled the transfer, not the will.
The court explained that the operating agreement was “a valid, binding contract” that governed ownership rights and transfer conditions, including what occurred at death. Because of that, the transfer under the operating agreement occurred outside of probate, and the will had no effect on that LLC interest.
This case set a powerful precedent in Florida:
“A properly drafted LLC operating agreement can override a conflicting provision in a will.”
What This Means for Florida Business Owners
If you own or co-own a Florida LLC, you need to understand that your operating agreement is effectively part of your estate plan — whether you realize it or not.
Here’s how it impacts you:
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Your membership interest may not be governed by your will.
If your LLC operating agreement specifies what happens upon your death, that clause controls the transfer — even if your will says something else.
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Your estate may never “own” the LLC interest.
Because the transfer occurs under contract law, the ownership might pass automatically outside of probate.
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Your heirs could be excluded if they’re not named in the agreement.
If your will names your children but your LLC agreement transfers ownership to a business partner, your partner wins — unless you amend the contract in time.
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Taxes and creditor issues still apply.
Even though the interest passes outside probate, it’s still counted toward your gross estate for federal tax purposes.
Why This Happens: LLC Interests Are Contractual Property
Under Florida’s Revised Limited Liability Company Act (Chapter 605, F.S.), an LLC member’s rights are defined by the operating agreement. That includes what happens upon death, withdrawal, or sale of an interest.
If the operating agreement is silent, the statute steps in:
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The deceased member’s economic rights (profits, distributions) pass to their estate.
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Their management rights do not — unless the surviving members consent to admit the heir as a new member.
However, if the operating agreement includes specific language — such as a “transfer on death” clause, buy-sell provision, or automatic succession — those terms take priority.
Essentially, the LLC agreement functions like a contract with built-in inheritance instructions.
Example Scenarios: How It Plays Out in Real Life
Scenario 1: The Partner’s Surprise
You co-own a Naples property-holding LLC with a partner. The operating agreement says that if either partner dies, the other automatically inherits the deceased partner’s share. Your will, however, leaves everything to your spouse.
When you pass away, your partner becomes the sole owner — not your spouse — because the contract controls.
Scenario 2: The Clean Succession Plan
A business owner works with an attorney to include a transfer-on-death clause in the LLC operating agreement, naming her daughter as the successor member.
When she passes, the transfer occurs automatically. The daughter immediately becomes the new member — no probate, no dispute, no delay.
The Importance of Drafting and Consistency
Because Florida law gives such power to the operating agreement, drafting precision is critical.
Here’s what to ensure:
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Explicit language detailing what happens to membership upon death or incapacity.
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Consistency with your will or trust, so there are no contradictions.
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Defined valuation and buy-out provisions if other members will purchase your interest.
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Designation of successor members or beneficiaries (especially for single-member LLCs).
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Proper execution and consent from all members, so the document is enforceable.
If the operating agreement is ambiguous or silent, your estate could face disputes between heirs and business partners — leading to costly litigation and possible dissolution.
Can an LLC Be Used to Avoid Probate?
Yes, if structured correctly. By including transfer-on-death (TOD) or buy-sell provisions in your operating agreement, your LLC membership can pass directly to a designated individual or entity, skipping probate entirely.
This approach can be powerful for:
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Real estate investors who hold multiple Florida properties in LLCs.
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Business owners who want seamless succession without court involvement.
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Families who want to avoid public probate proceedings.
However, these benefits only work when the LLC is paired with a cohesive estate plan — including a will or trust that doesn’t conflict with it.
How to Align Your Operating Agreement and Estate Plan
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Review your LLC agreement annually. Ensure it reflects your current succession goals.
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Coordinate with your estate planning attorney. Make sure your will, trust, and LLC documents don’t contradict one another.
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Add clarity to ownership transfers. Specify who inherits, how the interest is valued, and what approval is needed.
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Update designations as life changes. Marriage, divorce, or business growth can all trigger the need for revisions.
Taking a proactive approach now can prevent disputes later — and protect both your legacy and your loved ones.
The Bottom Line
In Florida, a will doesn’t always control what happens to your LLC. Your operating agreement — the contract that governs your company — may dictate ownership transfers upon death, even if your will says otherwise.
That’s why every business owner should treat their LLC agreement as a key part of their estate plan. Clear, coordinated drafting ensures that your wishes are honored and your business continues smoothly after you’re gone.