## Facts

- John P. Tita executed a 2017 will that specifically devised “all of my interests” in Layton Hills Properties, LLC to two children, Andre and Sandra, in equal shares, and left the residuary estate to his spouse, Eva.
- Layton Hills Properties, LLC was a closely held Utah LLC whose principal asset was Utah real property; the decedent held a 39.5% membership interest.
- The LLC operating agreement provided that, upon a member’s death, the member’s successor in interest (including the estate) would receive economic rights, and it also granted the LLC an optional “death buy out” right to purchase the deceased member’s interest from the estate by giving notice within 180 days.
- After the decedent’s death, the LLC exercised the death-buyout option, redeeming the decedent’s membership interest and paying the estate the buyout proceeds.
- In probate, Andre and Sandra sought distribution of the LLC interest (or its proceeds) under the will’s specific devise; Eva argued the specific devise failed and that the proceeds belonged to her as residuary beneficiary.
- The probate court ruled that the decedent’s LLC interest was part of the estate at death and that the post-death buyout proceeds passed under the specific devise to Andre and Sandra.
- Eva appealed.

## Issues

1. Whether an LLC operating agreement’s post-death redemption (death-buyout) of a member’s interest causes ademption of a will’s specific devise of that LLC interest.
2. Whether the buyout proceeds from the LLC’s redemption pass to the specific devisees or instead become part of the residuary estate.

## Decision

- The appellate court affirmed the probate court’s ruling for Andre and Sandra.
- The decedent’s LLC membership interest became an estate asset at the moment of death and was subject to the will’s specific devise.
- The LLC operating agreement’s death-buyout clause contemplated purchase of the deceased member’s interest from the estate and did not prevent the interest from passing into the estate.
- The post-death redemption converted the specifically devised interest into identifiable proceeds that passed to the specific devisees, not to the residuary beneficiary.

## Legal Principles

- A decedent’s property interests pass to the estate at death and may be disposed of by will.
- A specific devise is not adeemed when the devised property exists in the estate at death and is later converted through a post-death transaction; traceable proceeds may pass in place of the specific asset.
- An LLC operating agreement provision allowing the company to purchase a deceased member’s interest from the estate governs post-death disposition mechanics but does not determine the member’s testamentary beneficiaries.

## Conclusion

The court held that an LLC’s exercise of a contractual death-buyout option after a member’s death does not nullify a will’s specific devise of the member’s LLC interest; the resulting buyout proceeds pass to the named specific devisees rather than to the residuary beneficiary.


Tita v. Tita, 334 So. 3d 646 (Fla. Dist. Ct. App. 4th Dist. 2022)