Can a Trust Own an LLC?

By Jay S. Yu, Esq., Yu & Yu Law, Fullerton, California · Last reviewed October 2026

Yes. A trust, including a revocable living trust, can own an LLC by holding the membership interest. Business owners do this so the interest passes to their beneficiaries without probate. Check your operating agreement first, since it may limit transfers or require the other members’ consent.

If you’re thinking about protecting your business or planning your estate, you might be asking yourself: Can a trust own an LLC? The quick answer is yes! But there are some things you’ll want to know before you go ahead.

At Yu & Yu Law, I’m here to help you figure out how trusts and LLCs work together and why it might be a smart move for you and your family.

What Is an LLC?

An LLC, or Limited Liability Company, is a common way to run a business. It’s popular because it protects your personal stuff if your business gets into debt or legal trouble. Plus, it gives you some freedom in how you manage things and how you pay taxes.

What Is a Trust?

A trust is a legal setup where one person (called a trustee) looks after assets for other people (called beneficiaries). Lots of people use trusts in their estate plans to avoid court, keep things private, and decide how and when their things get passed on.

Can a Trust Own an LLC?

Yes! A trust can own an LLC. This means the trust itself becomes the owner (or member) of the business. The trustee runs the LLC for the benefit of the people named in the trust.

Lots of people do this because it helps keep their business safe and makes things easier when it’s time to pass the business down.

Why Put Your LLC Into a Trust?

There are a few good reasons to do this:

• Skip Probate: When the trust owns your LLC, the business usually doesn’t have to go through probate court if you pass away.

• Keep Things Private: Trusts keep your business ownership details out of public court records.

• Stay in Control: You can set rules in the trust about how your business should be managed and who benefits from it.

• Continuity: If you become incapacitated, your successor trustee can step in and manage your ownership interest without a court conservatorship.

Can a Living Trust Own an LLC?

Most folks use something called a revocable living trust to own their LLC. It’s flexible—you can change it while you’re alive. Then, when you pass away, it locks in place and helps transfer your business smoothly to the right people.

There are other types of trusts, too, but the revocable living trust is usually the simplest and most common choice.

What to Check Before Putting Your LLC in a Trust

Before you put your LLC in a trust, here are some important points:

• Check Your LLC Rules: Your LLC’s operating agreement might need to say that a trust can be an owner.

• Clear Powers: The trust should clearly say the trustee can manage the LLC.

• Taxes: Putting your LLC in a trust can affect taxes, so it’s a good idea to talk to your tax advisor or lawyer.

• Loans: If your business has loans, the lenders might want to approve this change.

Can an LLC Be a Trustee?

Sometimes, but rarely for a family living trust in California. California’s Financial Code limits who may engage in the trust business, which includes acting as a trustee, to trust companies with a certificate of authority, authorized banks, and a short list of exempt fiduciaries (Fin. Code §§ 115, 1550, 1551, 1553). The exemptions cover individuals serving as trustee of a family member’s trust, licensed professional fiduciaries, and a few others, and none of them is written for an LLC. Whether an LLC serving as trustee of one family’s trust is engaged in the trust business depends on the facts, so that question needs to be resolved before naming one. For most families, the simpler choice is to name individuals, such as yourself and then a trusted family member, or a licensed professional fiduciary or trust company. The reverse arrangement, where your trust owns the LLC, is common and is covered above.

How I Can Help at Yu & Yu Law

Moving your LLC into a trust can be a great way to protect your business and plan for the future. But it needs to be done right so you don’t run into trouble later.

At Yu & Yu Law, I’ll help you every step of the way — making sure your paperwork is in order and your plan fits your goals.

Want to Protect Your Business? Give My Office a Call

If you’re ready to learn more or want help putting your LLC into a trust, give my office a call. I offer free consultations and clear advice that’s easy to understand.

Call or text my office at (213) 835-0300 or book a time online to get started.

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Laws change frequently and there is no guarantee that the information in this article will be applicable or correct when you read this. You should consult with an attorney to discuss your specific situation. This article discusses California law; Jay S. Yu is licensed to practice in California.