How to Assign Your California LLC to Your Living Trust (Step-by-Step)
Big idea: You usually don’t “deed the LLC into the trust” the way you deed a house. You typically assign your LLC membership interest (your ownership) to your revocable living trust, so the trust becomes the owner of the LLC interest—while the LLC continues to own its assets (bank accounts, contracts, real estate, etc.).
(Educational info only—not legal or tax advice)
Step 1: Know what you’re actually transferring
There are two “layers” here:
Layer 1 (Ownership): You own an LLC membership interest (e.g., 100% of the LLC).
Layer 2 (Assets): The LLC owns its assets (cash, equipment, website, contracts, maybe real property).
A living trust transfer usually targets Layer 1: you assign your membership interest to your trust.
Step 2: Confirm your trust is ready to “receive” the LLC interest
Before you transfer anything, confirm:
Your trust is signed (and any amendments/restatements are signed).
You know the correct trust name and date (example: “The Smith Revocable Trust dated January 7, 2026”).
You know who will sign as Trustee (often you, if you’re the current trustee).
Interesting note: In many revocable trusts, you’re still effectively controlling everything as trustee during life—so this is less about “giving away control” and more about clean succession and probate avoidance.
Step 3: Read your LLC Operating Agreement (and the Articles/records)
You’re looking for transfer restrictions like:
“No transfer without consent of other members”
“Transfers only to certain permitted transferees”
Rules about whether the trust becomes a member vs. only an assignee (important in multi-member LLCs)
Even if you’re the only member, your operating agreement may still require a written record of the transfer.
Step 4: Identify your LLC’s tax status (because wording matters)
Ask: is the LLC…
Single-member (often a “disregarded entity” for federal income tax unless you elected otherwise), or
Multi-member (often taxed as a partnership unless it elected S-corp/C-corp treatment)
Practical reality: For many single-member, disregarded LLCs, assigning your interest to your revocable (grantor) trust often doesn’t change day-to-day tax reporting, because grantor trusts are commonly treated as the same taxpayer for income tax purposes—but your CPA should confirm for your situation.
Step 5: Prepare the key legal document — Assignment of LLC Membership Interest
This is the heart of the transfer.
Typical elements:
Your name as Assignor (you individually)
The trust (and trustee) as Assignee
The LLC name
The interest being transferred (e.g., “100% membership interest”)
Effective date
Signatures (often you sign twice if you’re also trustee: once individually, once as trustee)
Many California estate planning attorneys also add:
A Consent of Members/Managers (or a written resolution)
An operating agreement amendment reflecting the trust as owner/member
(Many estate planning resources describe this exact “assignment + operating agreement update” approach.) (Garmo & Garmo, LLP)
Pro tip: Put the assignment in your trust “funding” binder (or your digital vault). If nobody can find it later, your “clean plan” becomes an “expensive scavenger hunt.”
Step 6: Update internal LLC records (the stuff that proves it later)
Even if you never “file” your assignment with the state, you should update the LLC’s internal records, such as:
Membership ledger / company ownership record
Company minute book or resolution log
Operating agreement (amended or restated page showing the trust as the member)
Why this matters: In the real world, banks, title companies, buyers, and CPAs don’t want theories. They want paper.
Step 7: Decide what (if anything) needs updating with California Secretary of State
In California, the LLC’s Statement of Information is generally about the company’s addresses, managers/members (depending on structure), and agent for service of process. California’s SOS guidance emphasizes filing an updated statement when information changes in between regular filing periods. (California Secretary of State)
Important nuance: A membership transfer to a trust may or may not change what’s required on your Statement of Information, depending on:
Whether your LLC lists members/managers on the form/attachment
Whether the manager changes (often it does not)
Whether addresses/agent change (often they do not)
So, don’t reflexively file something “just because.” File if your reportable information changed.
Step 8: Consider IRS “Responsible Party” updates (sometimes overlooked)
If your “responsible party” for the LLC’s EIN changes, the IRS expects notification using Form 8822-B, and the IRS notes responsible party changes must be reported within 60 days. (IRS)
Good news: If you remain the same human being controlling the LLC, you often won’t need this.
But if a successor trustee or other person becomes the responsible party after incapacity/death, this can come up.
Step 9: Corporate Transparency Act / BOI reporting (check current status)
This area has been moving fast. As of FinCEN’s March 2025 update, FinCEN states that U.S. companies and U.S. persons are exempt from BOI reporting under an interim final rule, while certain foreign companies still have reporting deadlines. (FinCEN.gov)
Takeaway: Most California-formed LLCs (domestic) may be exempt under that stated update, but if you have a foreign LLC registration or unique facts, confirm.
Step 10: Double-check “real world” stakeholders (banks, insurers, partners, contracts)
Even though you’re transferring the ownership interest—not the assets—some relationships may still care:
Bank accounts (some banks want updated beneficial owner/authorized signer paperwork)
Contracts with anti-assignment clauses (usually about assigning the contract, not LLC ownership, but read carefully)
Lenders / SBA loans (can have change-of-control provisions)
Insurance policies (sometimes want updated named insured / additional insured language)
This is less about “the trust” and more about keeping operations smooth.
Step 11: Keep the LLC compliant so the trust transfer actually helps
A trust plan works best when the LLC stays clean:
File CA Statement of Information on schedule
Pay CA franchise tax / fees (as applicable)
Keep records current
Keep your trust and assignment documents easy for your successor trustee to find
Enjoyable truth: The best estate plan is the one your family can actually execute while they’re grieving—without needing a detective, a CPA, and a court order.
Common mistakes (and how to avoid them)
Mistake: Multi-member LLC with no consent
If the operating agreement requires consent and you skip it, you can create a future dispute.
Mistake: Confusing “member” vs “assignee”
Some operating agreements allow economic rights to transfer but restrict voting/management without consent—this matters when you want the trust (and later, the successor trustee) to actually have authority.
Quick checklist (California LLC → Living Trust)
✅ Trust signed; trust name/date confirmed
✅ Operating agreement reviewed for transfer rules
✅ Assignment of LLC membership interest drafted & signed
✅ Member/manager consent/resolution completed (if needed)
✅ Operating agreement and internal ownership records updated
✅ CA SOS Statement of Information reviewed/updated if reportable info changed (California Secretary of State)
✅ BOI/CTA status confirmed for your situation (FinCEN.gov)
✅ Bank/insurance/contracts reviewed for any change-of-control concerns
This article is a service of DeCosimo Law. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That's why we offer a Life & Legacy Planning Session, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Life & Legacy Planning Session.
This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking legal advice specific to your needs, such advice services must be obtained on your own, separate from this educational material.