How can I avoid probate with my ownership in an LLC or Corporation?

You are the owner of a membership interest in an Ohio limited liability company or shares in an Ohio corporation (collectively referred to as a “security”). Upon your death, what happens with this security? If upon your death you are the owner of such a security, then a probate estate will need to be opened in order to transfer that security to your heir or beneficiary. However, Ohio has a law which allows the owner of such security to bypass or skip the probate process and be transferred directly to the heir or beneficiary. If the company has documentation permitting a transfer on death of a security and the owner of the security and beneficiary follow the company’s procedures on the transferring of the security upon the owner’s death, then the company will transfer ownership of the security from the owner to the beneficiary WITHOUT first having to go through the probate process. This is a great estate planning tool.

If a transfer on death designation (“TOD”) is placed on a security by an owner, this TOD has no effect on the ownership of the security. The owner of the security still has the unilateral right to sell or transfer the security without beneficiary comment or input (of course subject to any sale or transfer restrictions in the company’s governing documents). The owner also has the right to remove, replace, or change the TOD at any time prior to death. In essence, the TOD just sits there passively until triggered upon the death of the owner of the security.

The company has the ability to set up a procedure to be followed in order to effectuate the transfer of the security from the deceased owner to the beneficiary. This process will typically be for the beneficiary to provide the company with the deceased owner’s death certificate along with an affidavit from the beneficiary establishing the right of the beneficiary to the transfer of the security. A TOD on a security is a great estate planning tool to avoid probate when the security is to be transferred to a spouse or family member.

If you are unsure if any security that you own does or does not contain a TOD, do not hesitate to be in contact to review.

Do you have questions about avoiding probate with your LLC or Corporation?

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Chris Corpus

Founding Partner at Corpus Law Inc

This article does not provide legal advice or create an attorney-client relationship. If you have any questions or would like to learn more about this topic or if you have other legal questions, do not hesitate to contact Chris Corpus, Esq. of Corpus Law Inc at 216-973-2475. Copyright Christopher A. Corpus 2025.