Can a Trust Own or Manage a Texas LLC? What Changed

Can a Trust Own an LLC in Texas?

Yes. Who owns a Manager Managed Texas LLC is set in the company agreement, not the Certificate of Formation, and a trust can be the member that owns the company. Now there are some who will say that this is not possible due to the way that a Trust is structured (or actually how it is specifically not structured) but it has been done for many years and will likely continue to be done. I, Nate Gilbert, am not a Trust attorney and don’t spend a great deal of time working with them, so I wouldn’t be the one to discuss this nuance with.

Can a Trust Manage an LLC? What the Secretary of State Changed

Starting in 2025, the Secretary of State took the position that a Trust is not an entity and therefore incapable of managing an LLC. Thus, they began rejecting Certificates of Formation that listed a Trust as a Manager or Managing Member.

Now, note that this is not a published rule, and you’re likely only to learn about it once you’ve filed your Certificate, and had it rejected. Like many Texas filing practices, this one surfaced through rejected filings rather than an announcement, and I had to find out the hard way when filing a Certificate for a client.

Why naming the trustee doesn’t work either

The obvious workaround is to list the trustee as manager instead. Unfortunately, it doesn’t hold up. If you list the individual without their capacity as Trustee of a Trust, then you haven’t named them as trustee and the whole thing kind of falls apart. List them as trustee, and the Secretary of State rejects that filing too. Specifically, their guidance to me when I inquired about it to the Counsel at the Secretary of State’s office was: “Although a trustee can act on behalf of the Trust, a person can’t be a managing member solely in their capacity as a trustee. They either are a managing member or they are not a managing member.“

The manager on the certificate is not the owner

In a manager-managed LLC, the Certificate of Formation lists the company’s managers, its governing authority, i.e., those who are capable of entering into contracts and doing business on behalf of the LLC. Being named manager doesn’t make someone a member, and being a member doesn’t require appearing on the certificate as a Manager. That separation is what makes the structure work: an eligible manager goes on the certificate, and the trust’s ownership goes in the company agreement. Through this workaround, the Trust is still the owner, if that is what the client desires, and the Secretary of State allows for the filing with the Manager listed on the Certificate.

How to Move an Existing LLC Into a Trust

If you already own an LLC and want your trust to hold it, the change happens in your company’s internal documents, such as your Operating or Company Agreement:

1. Check your Operating or Buy-Sell agreement’s transfer provisions. Most will require the consent of the other Members, as well as a valuation of the membership interest (though this can vary).
2. You’ll need to draft and internally file some kind of “Sale and Assignment of Membership Interest” whereby you transfer your Membership interest and all privileges associated with it to the Trust. You will also need some kind of Corporate Resolution outlining the consent of the Members from Step 1 (if required).
3. Update the company agreement’s member schedule to show the trust as the member.
4. Skip filing with the Secretary of State: if you’re manager managed (the only structure this works with) then you don’t need to file ownership changes with the Secretary of State, as only the Managers are listed there.

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