🔑 NY: What Happens When an LLC Member Dies or Becomes Incompetent?

When a member of a New York limited liability company (LLC) dies or becomes legally incompetent, what happens to their ownership interest and decision-making authority? New York’s Limited Liability Company Law § 608 provides a framework for handling these situations, ensuring continuity while protecting the member’s estate or affairs.

Full Text of LLCL § 608

§ 608. Powers of estate of a deceased or incompetent member

If a member who is a natural person dies or a court of competent jurisdiction adjudges him or her to be incompetent to manage his or her person or his or her property, the member's executor, administrator, guardian, conservator or other legal representative may exercise all of the member's rights for the purpose of settling his or her estate or administering his or her property, including any power under the operating agreement of an assignee to become a member. If a member is a corporation, trust or other entity and is dissolved or terminated, the powers of that member may be exercised by its legal representative or successor.

Estate Administration & Business Continuity

The statute allows an executor or administrator to step in and handle the deceased member’s interest. This means that pending decisions, distributions, or contractual rights tied to the LLC interest are not left in limbo.