Chapter 9 What Happens to a Member’s Interest on Death?

Chapter 9 What Happens to a Member’s Interest on Death?2016-03-27T15:00:24+00:00

Section 9.1 Disposition of a Person’s Membership Interest in the LLC After Death Depends on How the Deceased Member Holds Title to the Interest

An extremely important, but almost always overlooked LLC issue is who will inherit the membership interest in the company of a member who dies? I estimate that over 90 percent of the members of the LLCs that I have seen do not have a transfer on death plan for their interest in their LLC.

If you are a member of an LLC that has value, you must understand what will happen to your membership interest if you were to die. If you do not plan for your death, you may be leaving your loved ones a very expensive nightmare. The failure to plan for death can result in: (i) opening an expensive and time-consuming Superior Court probate to transfer the membership interest to your heir(s), and/or (ii) the membership interest being acquired by the wrong person(s) because the laws of your State of residence (rather than you) will determine who inherits your membership interest.

A Terrible Example of the Failure to Prepare for Death

The following is one example of many scenarios that can harm loved ones when the member of an LLC fails to plan for his or her death.

Example 1: Bob and Jane Smith are residents of Arizona and own World Wide Widgets, LLC, as community property, not as community property with right of survivorship. The LLC is worth $200,000. They have one child, Sue, and Bob has another child, David, from a prior marriage. Bob is estranged from David and has not had any contact with David in over twenty years. Bob dies without a Will or a Transfer of Membership Interest Testament. Bob’s 50% membership interest in the LLC must go through an expensive and time consuming Superior Court probate. Because Bob did not plan for his death, the State of Arizona will determine who inherits Bob’s property in his probate estate. The bad news for Bob’s wife Jane is that she will not inherit any part of Bob’s 50% interest in the LLC that is valued at $100,000. The good news for Sue and David, the estranged child not born to Jane, each of them will inherit one half (25%) of Bob’s 50% interest in the LLC valued at $50,000. Jane will become a reluctant and very unhappy “partner” with Bob’s estranged son who she has never met. Jane may not be as unhappy about her daughter inheriting one half of the Bob’s membership interest, but most husbands and most spouses prefer that property be left to the surviving spouse rather than one or more of their children.

Result of the failure to plan for death: The person who inherited one half of Bob’s membership interest was not who Bob wanted to inherit it. Bob’s wife Jane is left to deal with the expensive and emotionally draining problems caused by Bob’s failure to adopt a plan to protect his family. Bob’s family pays for Bob’s mistake and Bob’s estranged son collects a windfall.

When a person dies owning an interest in an Arizona LLC, the ownership of that membership interest is affected by how the member held title to the membership interest. The following Sections explain the various ways to hold title to property and what happens to the membership interest in an Arizona limited liability company when a member dies based on how the member held title:

Section 9.2 Joint Tenancy with Right of Survivorship (JTWROS)

If the membership interest of a deceased member were held as joint tenants with right of survivorship with one or more other living joint tenants (owners), the interest of the deceased member transfers automatically to the other joint owners equally without the need for a probate.

Example 2: Homer and Marge Simpson own World Wide Widgets, LLC, as joint tenants with right of survivorship. If either of them were to die, the survivor automatically becomes sole owner of the membership interest without the need for a probate. The big problems for the kids arise when the second spouse dies unless the second spouse to die has planned for death.

Example 3: Homer and Marge Simpson and their three kids own World Wide Widgets, LLC, as joint tenants with right of survivorship. If any of the five Simpsons were to die, the four survivors would automatically become the equal owners of the deceased’s membership interest without the need for a probate. The last surviving joint tenant will become the sole owner of the membership interest, which is when the big problems arise for the heirs of that person.

Beware of the Danger of Joint Tenancy: Think twice about ever naming a person as a joint tenant on title to property who really does not have or should not have a current ownership interest in the property. If a person who is named on the title as a joint tenant has creditor problems and/or files for bankruptcy, the creditor or the bankruptcy trustee could become the owner of that person’s share of the property.

Section 9.3 Tenants in Common

Another way for multiple owners to hold title to property is as tenants in common (TIC). Two or more people and/or entities may hold title to real and personal property (such as a membership interest in an LLC) as tenants in common. Under this form of ownership, each tenant in common (owner) owns the percentage or fraction of the entire ownership interest of all the tenants in common that is set forth in the vesting document that established the joint ownership of the tenants in common.

Example 4: Homer Simpson owns a 50% interest in World Wide Widgets, LLC, as a tenant in common with Ned Flanders who owns the other 50% interest. Note: If Homer acquired this property after marrying Marge, then for Homer to own his 50% interest entirely as separate property without Marge owning one half of Homer’s 50% TIC interest, Marge must sign a Disclaimer in which she acknowledges that Homer is the sole owner of the 50% interest as his separate property. Under Arizona law, property acquired by one spouse while married is presumed to be community property unless it was acquired as a gift or by inheritance.

Example 5: Ownership percentages do not have to be equal. Homer could own 75% as a tenant in common and Ned could own the remaining 25% as a tenant in common.

If the membership interest of a deceased member were held as tenants in common with other members, the interest of the deceased member does not necessarily go to the surviving tenants in common or transfer automatically on death to any person or entity unless the deceased member signed a proper Transfer of Membership Interest Testament in which the member designated his or her heirs. Instead, the TIC interest of the deceased will be inherited by: (i) the person(s), entity or entities designated in the deceased member’s Will or other transfer document, or (ii) if the deceased did not have a Will or other transfer document, the membership interest of the deceased spouse will go to the person or people set by Arizona under its statutory laws of intestate succession (the rules that state who inherits property when an Arizona resident dies without a Will). A probate may be necessary to transfer the membership interest of the deceased spouse unless the estate of the deceased qualifies as a small estate that can use an affidavit procedure rather than a probate.

Section 9.4 Community Property

In addition to the other methods of holding title to property mentioned in this Chapter, married people who are residents of Arizona can hold title to jointly owned property as community property (CP). Community property is slightly different from another form of holding joint title available to married couples who are Arizona residents called community property with right of survivorship (CPWROS), which is discussed in the following Section 9.5 Community Property with Right of Survivorship.

Arizona and several other states have a method of holding title to property called community property, which is a method available to residents of each of the community property states. Community property states include Washington, Oregon, California, Arizona, New Mexico and Texas. Community property the following identical characteristics:

1. Each spouse owns an undivided one half of the total interest owned by the couple. If Homer and Marge Simpson own a 50% membership interest in World Wide Widgets, LLC, then Homer owns an undivided 25% interest and Marge owns an undivided 25% interest.

2. If the spouses divorce, each spouse is entitled to the spouse’s one half of the total membership interest owned by the spouses.

3. Spouses can agree and transmute one type of community property into the other type by signing by proper documentation and, in the case of real estate, recording the deed in the county where the real property is located.

If a married couple who are Arizona residents holds title to property as mere CP (as opposed to community property with right of survivorship), then if one spouse dies, the interest of the deceased spouse does not transfer automatically to the surviving spouse and a probate may be necessary to transfer the membership interest of the deceased spouse unless the estate of the deceased qualifies as a small estate that can use an affidavit procedure in lieu of a probate.

Community Property Warning: When an Arizona married couple owns their interest in an LLC as mere CP (which is how it will be held unless the couple signs a document consenting to taking title as CPWROS), the interest of the deceased spouse will be inherited by: (i) the person(s), entity or entities designated in the deceased spouse’s Will or other transfer document, or (ii) if the deceased did not have a Will or other transfer document, the membership interest of the deceased spouse will go to the person or people set by Arizona under its statutory laws of intestate succession (the rules that state who inherits property when an Arizona resident dies without a Will).

Example 6: Homer and Marge Simpson are Arizona residents and the sole members of World Wide Widgets, LLC, which they own as community property. Homer owns the family home as his sole and separate property. Homer’s only children are his three children whose mother is Marge. Homer has a Will that provides that Bart Simpson will inherit Homer’s membership interest and Marge will inherit the home. When Homer dies, his one half interest in the LLC will be inherited by Bart, not his wife Marge and Marge will inherit the home.

Example 7: Same facts as in Example 6 except Homer does not have a Will, which in legal speak means Homer died “intestate.” When Homer dies without a Will, Marge will inherit all of his separate property and all of his community property. Result: Marge inherits Homer’s 50% interest in the LLC and all of Homer’s separate property ownership of the home.

Example 8: Same facts as in Example 7 except in addition to his three children with Marge, Homer is the father of Buford who he has never seen. When Homer dies without a Will or a Transfer of Membership Interest Testament, Marge will only inherit one half of Homer’s separate property and none of his community property. Result: Marge inherits one half of Homer’s separate property ownership of the home and none of the LLC interest. Homer’s four living children (Buford and Homer’s three children with Marge) each inherits a one quarter interest as tenants in common in the following property: (i) a one half interest in the home, and (ii) Homer’s 50% membership interest in the LLC. Each of the four kids would own 12.5% of the home and 12.5% of the LLC. Homer’s failure to plan has joined his family at the financial hip with Homer’s estranged son Buford indefinitely unless they can convince Buford to sell to them.

Section 9.5 Community Property with Right of Survivorship

In addition to the other methods of holding title to property mentioned in this Chapter, Arizona married people can hold title to jointly owned property as community property with Right of Survivorship (CPWROS). Community property with right of survivorship has the same characteristics as community property except the big difference between CP and CPWROS is what happens to the interest of a deceased spouse after death. The two primary differences are:

If property is held as CPWROS, then if one spouse dies, the interest of the deceased spouse transfers automatically to the surviving spouse without the need for a probate. CPWROS overrides a Will and a Trust. When one spouse dies owning property as CPWROS, the surviving spouse automatically inherits the interest of the deceased spouse regardless of what the deceased spouse may have put in his or her Will or Trust.

If property is held as mere CP, then if one spouse dies, the interest of the deceased spouse does not transfer automatically to the surviving spouse and a probate may be necessary to transfer the membership interest of the deceased spouse unless the estate of the deceased qualifies as a small estate that can use an affidavit procedure rather than a probate.

Example 9: Homer and Marge Simpson are Arizona residents and the sole members of World Wide Widgets, LLC, which they own as community property with right of survivorship. If either of them were to die, the survivor automatically becomes sole owner of the membership interest without the need for a probate. The big problems for the kids arise when the second spouse dies.

Example 10: Homer and Marge Simpson are Arizona residents and the sole members of World Wide Widgets, LLC, which they own as community property with right of survivorship. Homer’s Will states that on his death his membership interest in World Wide Widgets, LLC, goes equally to his three children instead of Marge. When Homer dies, Marge will automatically inherit Homer’s one half interest in the LLC despite the fact Homer’s Will says the kids inherit his 50% membership interest in the LLC.

Section 9.6 Arizona Law Presumption that Property Acquired by Either Spouse During Marriage is Community Property

Arizona community property law has a presumption that when a married couple resides in Arizona all property acquired during marriage by either spouse is community property (not CPWROS) unless the property was:

1. Acquired from an inheritance, or

2. Acquired as a gift.

The legal significance of Arizona’s community property law is that if a spouse who is an Arizona resident forms an Arizona LLC (or any type of company in or outside of Arizona), both spouses own the membership interest (or ownership interest) as community property, not as community property with right of survivorship, joint tenants, tenants in common or as the sole and separate property of one of the spouses.

Example 11: Homer and Marge Simpson are Arizona residents. Homer forms World Wide Widgets, LLC, with the intention that his ownership of the company be his sole and separate property. Neither the Articles of Incorporation, the Operating Agreement or any other company document contains Marge’s name. Homer is the only owner named on all LLC documents. Because Homer did not acquire the LLC by inheritance or by gift, Arizona law provides that Homer and Marge own the LLC as community property.

Solution: Homer should have Marge sign a Disclaimer by which she disclaims any interest in the company and acknowledges that the company is Homer’s sole and separate property.

Section 9.7 Caution For Married Arizona Members Who Intend to Acquire an Interest in an LLC as Separate Property – the Nonmember Spouse Must Sign a Disclaimer

Every person who is a resident of Arizona who wants to become a member of an Arizona limited liability company and who wants to hold title as his or her sole and separate property must satisfy the following two requirements to achieve that goal:

1. Create a vesting document that states that the person owns his or her membership interest as his or her sole and separate property, and

2. Obtain the signature of the nonmember spouse on a document in which the nonmember disclaims ownership of the member spouse’s membership interest in the company and that acknowledges that the member spouse owns his or her membership interest as sole and separate property.

If I formed your company, you will find the below Disclaimer in Section 6.2 of the company’s Operating Agreement. If your Formation Questionnaire indicated that one or more married members of the company was to hold title as his or her separate property, I prepared a the below Disclaimer for their spouses to sign and placed it at the end of the Operating Agreement. It is the responsibility of each such married member to get his or her spouse to sign the Disclaimer, give a copy of the signed Disclaimer to the manager to put in the company’s records and keep a copy of the Disclaimer in a safe place in case it is needed.

The following is the form of my Disclaimer of Membership Interests attached to my Operating Agreement as an Exhibit customized for Homer and Marge Simpson and Homer’s separate property ownership interest in World Wide Widgets, LLC.

DISCLAIMER OF MEMBERSHIP INTEREST
IN
World Wide Widgets, LL

The entire ownership interest of Homer Simpson (“Member”) in World Wide Widget, LLC, an Arizona limited liability company (“Company’) is the sole and separate property of Member, having been acquired with Member’s separate assets. The undersigned spouse of Member has no past or present right, title, interest, claim or lien of any kind or nature whatsoever in, to or against Member’s interest in the Company. This instrument is signed not for the purpose of making a gift to Member, but solely for the purpose of clearly showing of record that the undersigned has and claims no interest in and to the Company. The undersigned does hereby disclaim, remise, release and quit-claim unto Member and to the heirs and assigns of Member forever, all right, title, interest, claim and demand that the undersigned has or might appear to have in and to the interest of Member in and to the Company.

Date signed: October 17, 2015

_________________________
Marge Simpson

Section 9.8 How to Determine How an Unmarried Person Holds Title to His or Her Membership Interest in an Arizona Limited Liability Company

Unmarried people cannot hold title to property, including membership interests in an LLC, as community property or community property with right of survivorship. If an unmarried person acquires an interest in a limited liability company, he or she holds title as the sole owner unless the vesting document states that the unmarried person holds title as a tenant in common or as a joint tenant with one or more other owners.

Section 9.9 How to Determine How a Married Member Holds Title to His or Her Membership Interest in an Arizona Limited Liability Company

If I formed your Arizona limited liability company, then a married member can easily determine how the married member holds title to his or her membership interest by looking at the first paragraph of the Operating Agreement. The opening paragraph of the Operating Agreement I prepared for your company will name each member and if a member is a person, the text immediately after the person’s name will contain one of the following statements:

Husband and wife: This statement indicates the couple holds title to their membership interest as community property, but not necessarily as community property with right of survivorship unless: (i) Section 3.2 of the Operating Agreement states that they consent to hold title as CPWROS, and (ii) both spouses sign the Operating Agreement.

A married man dealing with his sole and separate property: This statement indicates that the man holds title as sole and separate property, but only if his wife signs a Disclaimer.

A married woman dealing with her sole and separate property: This statement indicates that the woman holds title as sole and separate property, but only if her husband signs a Disclaimer.

If I did not form your limited liability company, then you may have to conduct an examination of company documents to determine how a married member holds title to his or her membership interest. In general, to determine how a person holds title to property, look for language in the vesting document – the document by which the person acquired his or her interest in the property.

For an Arizona LLC, the vesting document may be any of the following documents:

  • Operating Agreement.  A properly prepared Operating Agreement will specify how a married member holds title. Unfortunately almost all document preparer prepared Operating Agreements, do-it-yourself Operating Agreements and many lawyer prepared Operating Agreements do not specify how the married members hold title.
  • A document by which a member of the LLC assigns all or portion of the member’s membership interest to a person(s) or entity.
  • A document by which a married member or a married couple transmutes the membership interest into one of the forms of ownership. For example, if a husband holds title to an interest in an Arizona LLC and he wants to transmute or convert the title to community property with right of survivorship, the husband can prepare and sign a document that states that as of a specified date, he transfer his membership interest to himself and his wife as community property. The husband should date and sign the document and both spouses should sign a statement at the end of the document in which they consent to holding title as CPWROS.

Regardless of which document a married couple uses to take title to their membership interest, the couple will not actually hold title as CPWROS unless each of the following requirements is satisfied:

a. The document states that the couple holds title as community property with right of survivorship, not as joint tenants with right of survivorship, not as tenants in common and not as community property.

b. There is language in the document that states that the married couple consents to hold title as community property with right of survivorship.

c. Both spouses sign the document.

Section 9.10 How Most Members Hold Title Their Membership Interest in an LLC

The reality is that most Arizona limited liability companies do not have an Operating Agreement and those whose members have a signed an Operating Agreement have a document that does not address how the members who are people hold title to their membership interests.

The following table is a quick guide to determine how people who are members of an Arizona limited liability company hold title. Assumptions used in the table: Homer and Marge Simpson are married and Arizona residents when Homer forms the LLC. Bart Simpson is an unmarried adult. There are no other vesting documents except those mentioned in the left column.

How do Members Hold Title to a Membership Interest

Vesting DocumentMember Holds Title As
Articles of Organization names only Homer Simpson as a member.Homer and Marge own the membership interest as community property, not community property with right of survivorship because Arizona community property law presumes all property acquired by a married spouse is community property unless it from a gift or an inheritance. If Homer dies, a probate may be needed to transfer his interest to his heirs.
Articles of Organization names only Homer Simpson as a member and the Operating Agreement names Homer and Marge as members, but does not characterize how they hold title to their membership.Homer and Marge own the membership interest as community property, not community property with right of survivorship.
Articles of Organization names only Homer Simpson as a member and the Operating Agreement names Homer and Marge as members who hold title as community property with right of survivorship. Homer signs the Operating Agreement, but Marge does not sign it.Homer and Marge own the membership interest as community property, not community property with right of survivorship because she never consent to hold title as CPWROS.
Articles of Organization names only Homer Simpson as a member and the Operating Agreement names Homer and Marge as members who hold title as community property with right of survivorship. Homer and Marge both sign the Operating Agreement, but the Operating Agreement does not contain a statement that each spouse consents to hold title as community property with right of survivorship.Homer and Marge own the membership interest as community property, not community property with right of survivorship, not community property with right of survivorship because they did not sign a document in which they consented to hold title as CPWROS.
Articles of Organization names only Homer Simpson as a member and the Operating Agreement names Homer and Marge as members who hold title as community property with right of survivorship. The Operating Agreement contains language that says Homer and Marge agree to hold title as CPWROS. Homer and Marge both sign the Operating Agreement.Homer and Marge hold title as community property with right of survivorship. If one of them dies, the other automatically inherits the membership interest of the deceased spouse.
Articles of Organization names only Homer Simpson as a member and the Operating Agreement states that Homer owns his membership interest as his sole and separate property.Homer and Marge own the membership interest as community property because Arizona community property law presumes all property acquired by a married spouse is community property unless it from a gift or an inheritance and Marge did not sign a Disclaimer.
Articles of Organization names only Homer Simpson as a member and the Operating Agreement states that Homer owns his membership interest as his sole and separate property. Marge signs a Disclaimer.Homer owsn the entire membership interest as his sole and separate property because Marge signed a disclaimer.
Articles of Organization names only Homer Simpson as a member and the Operating Agreement does not state how Homer holds title to his membership interest. Marge signs a Disclaimer.Homer owns the entire membership interest as his sole and separate property because Marge signed a disclaimer.
Articles of Organization names Homer and Bart Simpson as members and the Operating Agreement states that they hold title as joint tenants with right of survivorship. Marge signs a Disclaimer.Homer owns an undivided 50% interest in the company as his sole and separate property. Bart owns an undivided 50% interest in the company. If either Homer or Bart were to die, the survivor will automatically inherit the interest of the deceased member. Joint Tenancy Warning: If Bart files or bankruptcy, the Bankruptcy Trustee will become the owner of his undivided 50% interest. If Bart gets sued and gets a judgment against him, his creditor can sell Bart’s 50% interest at an auction to the highest bidder.
Ned Flanders signs a document that says as of October 10, 2010, I transfer my entire interest in World Wide Widgets, LLC, to Homer Simpson. Ned’s wife did not sign the document. Ned and his wife owned their membership interest as community property. Neither the Articles of Organization or the Operating Agreement mentions Homer Simpson.Homer acquired Ned’s undivided 50% interest in the company as community property. Homer and Marge each own an undivided 25% of the company. Ned’s wife continues to own the other 50% interest in the company because she did not sign a document that transferred any of her interest to Homer or Marge.
Articles of Organization names Homer Simpson and Lisa Simpson, Homer’s minor child as members. Marge signs a Disclaimer for Homer and Lisa.Homer owns his interest as his sole and separate property. Lisa owns her interest, but she is a minor and cannot sign any documents concerning her ownership. If a lender, title insurance company, buyer or seller wants the members of the LLC to sign a resolution, Homer will have to go to court and get himself appointed Lisa’s conservator so he can sign company legal documents on her behalf. When Lisa turns 18, she will become the unrestricted owner of her 50% interest.

If you do not hold title to an Arizona limited liability company in the manner that you desire, you must prepare and sign an appropriate document that changes the type of ownership to satisfy your desire. If you are married, the change in title may require your spouse to sign the vesting document if both spouse will own the membership interest jointly or a Disclaimer if he or she will not own any of the membership interest.

For information on how to hire a KEYTLaw attorney to prepare the necessary vesting document to change the method of holding title to a membership interest in an Arizona LLC, call me, Richard Keyt, at 480-664-7478.

Section 9.11 Who Will Inherit Your Membership Interest When You Die?

The reason I have written all of the material in this Chapter that precedes this Section is to help you understand what will happen to your membership interest in your company when you die. Ask yourself these very important questions:

a. Do you care who inherits your interest in the Company when you die? If the answer is no, skip the rest of this Chapter and go the next Chapter.

b. Who will inherit your membership interest in the company when you die? You must know the answer to this question because if you do not, your membership interest may not go to your desired heir or it may go to your desired heir only after an expensive and public probate.

c. If you are married and your spouse will inherit your membership interest in the Company, who will inherit your spouse’s membership interest in the company when your spouse dies? If your spouse will inherit your membership interest on your death, you must know the answer to this question because if you do not, your membership interest inherited by your spouse may not go to your desired heir after your spouse’s death or it may go to your desired heir only after an expensive and public probate.

Do you have a plan in place by which you pick who inherits your interest in the company or will the State of Arizona decide who inherits your membership interest? If you have a plan that picks your heirs does it avoid probate or does the transfer on death happen automatically, which is what occurs when your membership interest is owned by a Trust or if you have signed a Transfer of Membership Interest Testament.

Section 9.12 What You Must Do to Insure that When You Die Your Membership Interest Will be Inherited by the Person(s) You Chose as Quickly and Inexpensively as Possible

If you own a membership interest in one or more LLCs and want to protect your loved ones from the major problems caused by the failure to plan for your death, you must adopt one of the following solutions:

Cheapest & Easiest Solution: Create a Transfer of Membership Interest Testament by which you specify who inherits your membership interest in your Arizona LLCs when you die. Pros: A relatively inexpensive and simple solution. I charge $247 (one document) or $347 (for a married couple) to prepare a document called a Transfer of Membership Interest Testament. This is a relatively small amount considering my typical fee to do a simple uncontested probate is $2,000 – $2,500 and it takes five to six months.

In this document you specify who inherits your membership interest in the Company when you die. You can name a single heir, multiple heirs or a company or a charity. You may name alternate heirs if your first choice(s) of heirs were to die before you. The Transfer of Membership Interest Testament is signed by the Member and notarized and witnessed by two witnesses who are not your heirs.

Limitations: The Transfer of Membership Interest Testament is not effective until your death so if you become incapacitated, it has no effect. You cannot use a Transfer of Membership Interest Testament to control ownership of the membership interest after your death. If that is your goal, you must create a Trust and transfer ownership of your membership interest to the Trust. The Transfer of Membership Interest Testament cannot be used to transfer other assets. It is expressly limited to transferring membership interests in Arizona limited liability companies.

Hire KEYTLaw to Prepare a Transfer of Membership Interest Testament

To hire us to prepare a Transfer of Membership Interest Testament do the following:

Have You Taken Steps to Protect Your Family if You Were to Die?  If Not, Hire Richard Keyt to Prepare Your Trust & Estate Plan

I frequently ask people “what is your most valuable asset?”  Most people say their most valuable asset is their loved ones.  Unfortunately most people have not taken action to protect their loved ones from the bad things that can happen if they were to die or become incapacitated.  If you do not have all of the following estate planning documents your family is unprotected and will pay the price of your failure to plan:

  • Revocable living trust
  • Will
  • Living Will
  • Healthcare Power of Attorney
  • Financial Power of Attorney
  • HIPAA Authorization
  • Personal Property Memorandum

The trust is the foundation of your estate plan because assets owned by the trust avoid probate and the trust contains your plan on what happens to your assets after you are gone.  A trust can also provide for the management of your assets if you are alive, but unable to manage your affairs because you become incapacitated. A well drafted Trust can also provide lifetime asset protection for your loved ones who inherit your property.

Read my articles called “Why You Need an Estate Plan to Protect Your Family and the High Cost of Procrastination and Neglect” and “Arizona Estate Planning FAQ.” For more information about Trusts and what is included in my complete estate plan and the costs see “Arizona Estate Plan Cost & Contents.”

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