Can a Trust Own an LLC in Texas?

Yes. Texas law does not restrict LLC membership to individuals. Under Tex. Bus. Org. Code § 101.001 et seq., a trust can hold a membership interest in an LLC. The trustee acts on behalf of the trust as the member, exercising voting rights and receiving distributions according to the trust document and LLC operating agreement.

How Trust Ownership Works

The trust itself becomes the member—not the individual beneficiaries. The trustee holds legal title to the membership interest and has authority to manage or vote the interest per the trust terms. This structure is common for estate planning, asset protection, and multi-generational wealth transfer.

The trustee's powers depend on the trust document and Texas trust law, not LLC law. The trustee must comply with fiduciary duties owed to beneficiaries when making decisions about the LLC membership.

Operating Agreement Requirements

Texas does not require a written operating agreement (Tex. Bus. Org. Code § 101.052), but one is strongly recommended when a trust is a member. The agreement should specify:

• Trustee authority to manage, vote, or transfer the membership interest
• Voting rights on member matters
• Distribution timing and amounts to the trust
• Successor trustee provisions

Default rules under Chapter 101 apply if no agreement exists, including equal profit/loss sharing and member management authority.

Key Considerations

Charging Order Protection

Texas provides charging order protection under Tex. Bus. Org. Code § 101.112. Creditors cannot seize the LLC membership directly but may receive distributions if ordered by a court. This protection extends to trust-owned interests.

Tax Treatment

Trust-owned LLCs are taxed based on the trust's classification. Consult a CPA regarding whether the trust is a grantor trust, non-grantor trust, or irrevocable trust, as this affects tax reporting and liability.

Trustee Succession

When a trustee changes, the successor trustee automatically assumes the membership interest without LLC consent (absent operating agreement restrictions). The membership interest remains bound by the LLC's terms.

Next Steps

1. Authorize LLC membership in the trust document
2. Draft an LLC operating agreement addressing trust-member provisions
3. File Articles of Organization with the Texas Secretary of State
4. Consult a CPA regarding tax classification
5. Review your estate plan to ensure alignment with LLC ownership

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This is general information, not legal advice. Consult a Texas business attorney for your specific situation.