Can a Trust Own an LLC?
Yes. A trust can own a membership interest in a Texas LLC, and for an owner who has spent years building a company, moving that interest into a trust is one of the more overlooked ways to protect what you built. Most people plan for their house and their bank accounts and forget that their LLC — often the single largest asset they own — passes under the same default rules as everything else if it never gets moved into a trust.
Under Texas law, a membership interest in an LLC is personal property, the same as a car or a brokerage account. Business Organizations Code Section 101.106 says so directly. That one fact drives everything below: personal property titled in your own name goes through probate when you die, and personal property already titled in a properly funded trust generally does not.
The Benefits of Putting Your LLC in a Trust
Assigning your membership interest to a trust instead of holding it in your own name does four things for a Texas LLC owner:
- Probate avoidance — Because a membership interest is personal property under Section 101.106, an interest you hold individually goes through the Texas probate process like any other asset you leave behind. An interest already held by a properly funded trust passes to your beneficiaries under the trust's own terms, with no probate court involved at all.
- Privacy — Probate is a public court proceeding. The inventory filed with the court, the value of what you owned, and who inherits it all become part of the public record. A trust's terms are never filed anywhere and stay private.
- Continuity during incapacity — A trust does not just take over when you die. If an injury, an illness, or anything else keeps you from running the company for a stretch, your successor trustee steps in under terms you already wrote, instead of leaving the company's management in limbo while a court works out who has authority to act.
- Marital-property clarity — Texas is a community property state, and Section 101.106 addresses that directly: a membership interest can be community property, but the right to manage and run the company is not. That split can leave a spouse with an economic claim on the interest and no say in how the company is run. Spelling out control in the trust addresses that mismatch by name instead of leaving it to default rules.
None of this requires giving up anything while you are alive and well. A revocable trust can own the membership interest today and still let you run the company exactly as you do now.
Revocable or Irrevocable — Which Should Own Your LLC?
Texas trusts are created and governed under the Texas Trust Code. Under Property Code Section 112.001, a trust can be created by a written declaration, a transfer of property to a trustee, or a transfer that takes effect at your death. Whether the trust that ends up owning your membership interest is revocable or irrevocable changes what it can actually do for you.
A revocable living trust can be amended or revoked at any time under Property Code Section 112.051, which is exactly what makes it useful during your lifetime. Your membership interest moves into the trust, you keep full control as trustee, you keep receiving distributions, and none of it is locked in — you can move the interest back out, change beneficiaries, or unwind the trust whenever you want. The tradeoff is that a revocable trust does not protect the interest from your own creditors. Because you can still reach it, a court can generally treat it as if you owned the interest directly.
An irrevocable trust gives up that flexibility for real separation between you and the asset. Once your membership interest is inside an irrevocable trust, you generally cannot get it back or change the trust's terms on your own — and that same separation is what can put the interest genuinely out of reach of a creditor, if the trust is structured to do it.
A Self-Settled Asset Protection Trust Is a Different Question
The trust described above protects your membership interest from probate and keeps the company running if you're incapacitated, but it does not, by itself, shield that interest from your own creditors while you're alive — unless it's irrevocable and you've genuinely given up control. Some owners want to go further: a trust structured specifically to protect an asset from the owner's own future creditors while the owner still benefits from it, generally called a self-settled asset protection trust. Texas does not have a statute allowing that structure domestically. Under Property Code Section 112.035(d), a provision restraining transfer of your own beneficial interest does not stop your own creditors from reaching it once you're both the settlor and the beneficiary. A handful of other states — Wyoming among them — have passed legislation creating that exception, and a Texas LLC owner who specifically wants a self-settled asset protection trust typically has to set one up under a state like Wyoming's law rather than Texas's. See our pages on whether Texas allows asset protection trusts and on the Wyoming Asset Protection Trust for the full comparison.
For most Texas LLC owners this matters less than it sounds like it should. Business Organizations Code Section 101.112 already gives a membership interest charging-order protection against the member's own personal creditors: a creditor can't seize the interest or force a sale, only get a court order redirecting a future distribution, and Section 101.112(g) extends that same protection to single-member LLCs. A properly maintained Texas LLC, held in a trust for the probate and continuity benefits above, already delivers most of what an out-of-state self-settled trust is marketed to add on top.
What Happens if You Don't Move the LLC Into a Trust
Business Organizations Code Section 101.1115 spells out the default if you never do this: when a member dies, the member's surviving spouse and any heir, devisee, or personal representative become assignees of the membership interest, not members. An assignee can receive distributions but has no vote and no say in how the company is run until the remaining members admit them as a full member under Section 101.109 — a step that takes their cooperation, not just paperwork. The same rule applies on divorce. Waiting until one of those events happens hands the decision about your family's role in the company to whoever is left running it, instead of to you.
How to Move a Texas LLC Into a Trust
Deciding a trust should own your LLC and actually making the transfer are two different steps. First, read your company agreement before you sign anything. Most Texas company agreements restrict how and to whom a membership interest can be assigned, and an assignment that skips a required consent or procedure can be ineffective even though everyone involved intended it to work. Our page on the Texas LLC Operating Agreement covers what that document typically controls.
Next, sign an assignment of your membership interest to the trust — as the individual member assigning it, and again as trustee accepting it. Business Organizations Code Section 101.108 permits a membership interest to be wholly or partly assigned, but the assignment by itself only transfers the economic rights: the right to distributions and allocations. It does not automatically make the trust a voting member with a say in company decisions. Under Section 101.109, the trust becomes a full member only when the other members approve it — which, in a single-member LLC, is a formality you satisfy yourself, and in a multi-member LLC, is a step worth confirming in writing before you assume the assignment did more than it did.
Then update the company's own records. Section 101.501 requires an LLC to keep a current list of each member's ownership interest along with the certificate of formation and company agreement, and that list — not a new state filing — is normally where the change belongs. Texas's Certificate of Formation identifies only the LLC's initial members or managers at formation; it isn't required to track every later change in ownership. If your original filing named you individually and you want the public record to match, you can file a Certificate of Amendment — Form 424, a $150 state filing fee — but for most owners that step is optional, not required, to complete the transfer.
Finally, amend the company agreement to reflect the trust as the new owner of the interest, and — especially in a multi-member LLC — have the other members sign a written acknowledgment of the transfer. Neither step is legally required in every case, but both make the change easy to prove later and hard to dispute, which matters far more the day someone actually needs to rely on it.
Our page on LLC for Estate Planning covers how the LLC and trust layers are meant to work together, and our page on funding a trust walks through moving other kinds of assets into the same trust.
Get the sequence right and a membership interest is one of the more straightforward assets to move into a trust — there's no deed to record and no account to retitle with a bank. Get the company agreement step wrong, or skip the other members' consent, and you can end up with an assignment that transfers less than you think it does. Talk to your attorney before you sign the assignment, not after, so the transfer actually does what you intend.
Frequently Asked Questions
Can a Trust Own an LLC in Texas?
Yes. Nothing in Texas law prevents a revocable or irrevocable trust from owning a membership interest in a Texas LLC, and it's a common part of estate planning for business owners who want to protect an active business interest or pass it to their heirs without probate.
Does My LLC's Operating Agreement Need to Allow Trust Ownership?
There's no state-law requirement that a company agreement specifically authorize trust ownership, but most agreements do restrict who a member can assign their interest to and how. Check your own agreement's transfer provisions before you sign an assignment, not after.
Should a Revocable Trust Be the Sole Member of My LLC?
For most single-member LLC owners with a revocable living trust already in place, yes — in almost all cases we recommend making the trust the member rather than the individual. It avoids probate on the interest and keeps the LLC's ownership private, and because the trust is revocable, you keep the same day-to-day control you have now.
Does Assigning My LLC to a Trust Make the Trust a Voting Member?
Not automatically. An assignment under Section 101.108 transfers the economic rights — distributions and allocations — but the trust becomes a full voting member only when the other members approve it under Section 101.109. In a single-member LLC that approval is yours alone to give; in a multi-member LLC it takes the other members' cooperation.
What's the Real Benefit of Having a Trust Own My LLC Instead of Me?
Probate avoidance, privacy, and continuity if you become incapacitated are the three that apply to nearly every owner. An irrevocable trust can add real creditor protection on top of those, at the cost of giving up direct control over the interest.
Does Putting My LLC in a Trust Change How It's Taxed?
No. A Texas LLC's franchise tax and Public Information Report obligations run against the company itself, not against whoever owns the membership interest, so moving the interest into a trust doesn't change what the LLC owes or files with the Comptroller. At the federal level, whether the trust is revocable or irrevocable affects who reports the LLC's income — that's a question for your CPA, not a state-law question.
How Does a Trust Benefit a Business Owner Beyond the LLC Itself?
The same trust that owns your membership interest can hold your other assets too — real estate, investment accounts, life insurance proceeds — under one set of instructions and one successor trustee, instead of coordinating separate plans for the business and everything else you own.
Is a Trust or an LLC Better for My Business?
They solve different problems, not competing ones. The LLC is what shields you from the business's liabilities and gives the business a legal structure to operate under. The trust is what controls who owns the LLC and what happens to that ownership when you die or can't act — most complete plans use both together rather than picking one.