If a member of an Arizona LLC dies and the member did not take action to protect the member’s loved one(s) bad things will happen. The failure to plan for death creates the following problems:
1. The membership interest of the deceased member may not be inherited by the person or people the deceased member would want to inherit the membership interest.
2. A person who inherits the membership interest of a deceased member of a multi-member LLC will not be a member of the LLC. Instead, the heir will acquire only an economic interest in the LLC, which means the heir(s) will not be able to vote on any issue or receive records that all members have a right to receive.
3. The person who inherits the LLC interest may have to do an expensive and time consuming court probate to change ownership of the LLC.
If you have life insurance you have given the life insurance company a beneficiary designation that states who gets the life insurance proceeds if you die. If you own an Arizona LLC you need to do the same thing for your LLC, i.e., sign an LLC Beneficiary Designation form to eliminate the three problems described below that arise when you do not designate your LLC beneficiary or beneficiaries.
Click on the blue text below or the + icon to open the text box to see the explanation of each problem.
Bottom Line: Residents of Arizona Who Own an LLC Need to Sign an LLC Beneficiary Designation Form to Insure the Right Person Inherits Their LLC & Becomes a Member without the Need for a Probate
Act now to protect your loved ones before it is too late. Eliminate all three of the problems described above by purchasing an LLC Beneficiary Designation Form.