How do I gift them the LLC interest and what kind of paperwork / forms do I have to fill out?

You are advised to obtain legal counsel to assist you in the transfer of interests in the LLC, as gifts to you minor children; such a transfer can have long term effects, particularly if you want to sell the LLC; minors in that event would require petition for guardianship of the children to act on their behalf in the event of you want to sell the LLC. An ounce of prevention is worth a pound of cure.

You don't need to, but it is a very good idea. Likely, you would want to set up 3 virtually identical trusts for them. If you give it to them outright, and not to a guardian, custodian or trustee, then you're stuck with co-owners who can't so much as vote until they're 18. I don't know if custodianship under California Uniform Transfers to Minors Act works for a LLC; if it does, that might be an attractive and less expensive option. Guardianship would be more expensive and less flexible than a trust. You likely will need an appraisal of the interests being given. I would recommend that you either give slightly over the annual exclusion amount, or give one or more a bit of cash, so that you will be required to file a gift tax return. That way you can start the statute of limitations period running and be sure that your plan is actually working.

You don't need to form a trust, but you do need to see an estate planning attorney to explore all your options and how you give a dollar amount gift in a property without an appraised agreed value.

A minor can be a limited partner in the LLC. There is nothing that precludes that. You need to make sure that you do the paperwork properly and account for it with your CPA properly. You do not have to form a Trust to do this but you do need to follow your LLC's charter agreement to do it properly. You can also form a Family Limited Partnership and have the Partnership be a Limited Partner in the LLC and have the minors be part of the FLP. It is a straightforward procedure for an attorney who knows how to do this and I would suggest speaking with one to make sure you do it correctly especially if real property is involved in the LLC.