Arizona LLC Formation: Shield Your Estate From Probate
Forming an Arizona LLC and aligning it with a revocable living trust and clear transfer provisions can streamline succession and often keep your business and investment interests out of probate. The key is how the LLC membership interest is titled and what your operating agreement says about death or incapacity. Always verify current requirements with the Arizona Corporation Commission (ACC) and applicable statutes.
Why Use an LLC in Arizona Estate Planning?
An Arizona limited liability company (LLC) can centralize ownership and management of business interests, rentals, and investment holdings. With a well-drafted operating agreement and coordinated estate planning, control can transition to your chosen successor with less delay and court involvement. Typically, it is the LLC membership interest that transfers outside probate (for example, when owned by your revocable trust)—the LLC continues to own its underlying assets.
Resources: Arizona Corporation Commission — LLCs; Arizona Revised Statutes, Title 29 (LLCs); Arizona Revised Statutes, Title 14 (Probate/Trusts).
How an LLC Helps Avoid Probate
Probate is generally triggered by assets titled in a decedent’s individual name without a valid beneficiary, survivorship, or trust arrangement. If your LLC membership interest is titled in your revocable living trust—or transfers under valid operating agreement provisions—your successor trustee or successor owner can usually assume control without a full probate proceeding. The LLC itself does not eliminate probate automatically; outcomes turn on how the membership interest is owned and how transfers on death or incapacity are handled in your documents.
See: A.R.S. Title 14 (nonprobate transfers and trusts).
Core Steps to Form an Arizona LLC
- Choose a compliant name and check availability with the Arizona Corporation Commission (ACC).
- Appoint a statutory agent with a physical (street) address in Arizona and obtain their written acceptance. See ACC guidance and A.R.S. Title 29.
- File Articles of Organization with the ACC and pay the required fee (standard or expedited processing may be available).
- Draft an operating agreement addressing ownership, management, successor management on death or incapacity, and permitted transfers to trusts or heirs.
- Obtain an EIN from the IRS if needed and open a dedicated business bank account.
- Comply with any applicable local licensing and Arizona transaction privilege tax requirements.
Structuring Ownership to Reduce Probate Risk
- Use a revocable living trust to hold your LLC membership interest so your successor trustee can manage the interest without probate.
- For multi-member LLCs, include buy-sell or death/disability provisions that clearly set valuation, funding, and successor ownership rules.
- Coordinate beneficiary designations on related assets (e.g., life insurance or payable-on-death accounts) with your LLC and trust plan.
- Keep assignments of membership interest current, and ensure company records reflect the trust as the member when that is your design.
- Account for Arizona community property and spousal rights when drafting and executing transfers.
Authority: A.R.S. Title 14 (trusts/nonprobate transfers); A.R.S. Title 29 (LLCs).
Key Arizona-Specific Considerations
- Filing and statutory agent: Arizona LLCs are filed with the ACC, and a statutory agent with a physical Arizona address is required. See ACC LLC page and A.R.S. Title 29.
- Publication: The ACC provides online notice for many domestic filings, and publication is not required in numerous cases. However, publication obligations can vary by entity type and circumstances—always confirm current ACC guidance. See ACC FAQs.
- Series LLC: Arizona recognizes series LLCs, subject to statutory compliance. Evaluate whether a traditional LLC or series structure is appropriate for your assets and risk profile. See ACC LLC page (Series LLC) and A.R.S. Title 29.
- Management model: Arizona permits member-managed or manager-managed LLCs; choose the approach that supports incapacity planning and successor management.
- Keep your agent and records current: Missed notices or outdated ownership records can complicate transitions.
Common Mistakes to Avoid
- Forming the LLC but failing to title intended assets in the LLC.
- Not assigning your membership interest to your revocable trust or omitting clear transfer provisions in the operating agreement.
- Leaving out death or incapacity procedures.
- Commingling personal and company funds.
- Not updating documents after marriage, divorce, ownership changes, or major acquisitions.
Practical Tips
- List your trust as member in the company records immediately after formation to avoid gaps.
- Add a death/incapacity section in the operating agreement with a simple transfer affidavit for your successor.
- Keep a binder (physical or digital) with Articles, Operating Agreement, EIN letter, membership assignments, and annual compliance notes.
- Reconfirm your statutory agent annually and update any address changes with the ACC within required timeframes.
Coordinating Your LLC With a Revocable Trust
Your trust can own the membership interest and name a successor trustee to act if you are incapacitated or pass away. Your attorney typically prepares an assignment of interest to the trust and updates the company records. The operating agreement should recognize the trust as a permitted transferee and outline how successor management works.
Reference: A.R.S. Title 14.
When Probate May Still Be Required
Probate can still arise if the membership interest remains in your individual name at death without valid transfer arrangements, if disputes occur among heirs or members, or if assets were never properly conveyed to the LLC. Certain creditor claims and title issues may also require court involvement. Careful titling, documentation, and company formalities reduce these risks.
Practical Timeline and Costs
Arizona offers online filing for Articles of Organization with standard and expedited options through the ACC. Processing times and fees change, and vary by method and workload. Build in time for EIN issuance, banking, and execution of your operating agreement and trust documents.
See: ACC LLC page and ACC FAQs.
Checklist to Get Started
- Confirm name availability with the ACC
- Select member- or manager-managed structure
- Appoint a statutory agent and obtain written acceptance
- File Articles of Organization and pay the fee
- Draft and sign an operating agreement with death/incapacity provisions
- Obtain an EIN and open a dedicated bank account
- Assign the membership interest to your revocable trust (if used) and update company records
- Retitle intended assets into the LLC and update insurance
- Calendar renewals and maintain compliance
FAQ
Does an Arizona LLC automatically avoid probate?
No. The LLC helps when the membership interest is titled to a revocable trust or transfers under valid operating agreement provisions. Otherwise, probate may still be required.
Should my trust or I be listed as the member?
For probate avoidance, many owners list their revocable trust as the member and keep assignments and company records consistent with that structure.
Do I need a newspaper publication for my Arizona LLC?
Often no, because the ACC provides online notice, but exceptions exist. Confirm current ACC guidance before filing.
Can Arizona LLCs use a series structure?
Yes, Arizona recognizes series LLCs subject to statutory compliance. Evaluate whether a traditional or series LLC fits your risk and administrative preferences.
How We Help
We form Arizona LLCs, draft operating agreements tailored for estate planning, coordinate assignments to revocable trusts, and align titling of real estate and investments. We also review existing LLCs for probate exposure and update documents to reflect changes in family or business circumstances.
Ready to get started? Contact us to discuss your goals.
Important Arizona Disclaimer
This blog is for general informational purposes only and is not legal advice. Reading it does not create an attorney-client relationship. Laws and procedures change, and outcomes depend on specific facts. Consult a licensed Arizona attorney about your situation.