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An LLC interest held outside of a trust is considered personal property and subject to probate upon the owner’s death.

You can spare your successor trustee that pain, and spare your estate the cost of probate, by transferring your LLC interests to your trust. Doing so can help you achieve your major estate planning objectives and pave the way for a smooth and hassle-free transition of your LLC to your beneficiaries.

Here are common steps for conveying your LLC ownership to your trust:

  • Be sure that your LLC’s operating agreement allows you to transfer your interest to a trust. If

Continue Reading Should your revocable trust own your LLC?

Creating a trust is of little benefit if your assets have not been properly transferred to it.

The situation we’re about to describe sounds like modern-day folklore, but it is painfully true and far more common than one might realize.

Consider the story of John and Jane. Because of some recent

changes in their family and business situations

, they wisely scheduled a meeting with an estate planning attorney for a review of their 10-year-old trust and related documents. The review revealed that, while their trust otherwise seemed to be in order, it was missing a key element:


Continue Reading Funding your trust: a crucial step in achieving the benefits of a sound estate plan

A new federal law requires most legal entities to report specific information about the business and its owners.

Effective January 1, 2024, the federal Corporate Transparency Act (CTA) requires the majority of companies doing business in the U.S. to report to the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) specific information about the business entity and the people who have “substantial control” of it.

The CTA is a provision of the Anti-Money Laundering Act, which is part of a federal effort to combat shell corporations, LLCs and other entities that engage in illegal money laundering and other criminal financial activities.
Continue Reading Corporate Transparency Act places new reporting requirements on most business entities

The good news: Assets transferred to a revocable or “living” trust continue to receive the step-up.

Step-Up in Basis.

Generally, assets that are part of a person’s gross estate for estate tax purposes receive a step-up in tax basis at the time of the owner’s death, pursuant to Internal Revenue Code Section 1014. The higher basis reduces the taxable gain on the asset when it is sold.


In 1990, Michael bought a Babe Ruth baseball card for $100,000. By early 2020, its value had grown to $400,000. If he had sold it then, he would have owed taxes on
Continue Reading IRS: Assets conveyed to an irrevocable grantor trust are not eligible for step-up in basis

If you are the successor trustee or a beneficiary of an irrevocable trust, you should be aware of some important reporting provisions contained in the Arizona Trust Code.

If you are the successor trustee or a beneficiary of an irrevocable trust, you should be aware of some important reporting provisions contained in the Arizona Trust Code.

The most common type of trust in a typical estate plan is a “living” or revocable trust, which is usually controlled by the grantor or “trustmaker” (i.e., the person or couple who created the trust) and can be changed at any time during their
Continue Reading Irrevocable trusts in Arizona: Trustee reporting and notification requirements

For individuals serving in a fiduciary role, reasonable levels of compensation vary from case to case, and their determination is very fact specific.

“Can I get paid? If I can, how much?”

Those are among the most common questions we receive from individuals who, perhaps for the first time, are serving as the trustee of a family member’s trust or as personal representative of their estate.

Let’s take those two questions in order.

The first one is easy: Yes – Arizona law provides that a trustee (see

A.R.S. § 14-10708

) or personal representative (

A.R.S. § 14-3719

) is
Continue Reading Reasonable compensation for Arizona trustees and personal representatives

For many sellers, withstanding the challenges of the due diligence phase depends on keeping their emotions in check and anticipating the buyer’s requests for information.

If you have been through the sale of a business, you have likely experienced the tension, tedium and conflict of “due diligence” – a key phase of the deal during which the buyer truly gets to know the business they are buying.

If the sale of your business will be your first such transaction, brace yourself for a potentially bumpy ride, as the euphoria of a signed letter of intent (

see related article

Continue Reading Stress test: Due diligence in a business sale

In a business sale, the letter of intent is a vital document, and sellers should thoroughly understand its purpose and scope.

In most business sales, the deal begins with a discussion between a buyer and a business owner (or the owner’s M&A broker) and moves from the “talking” stage to the “serious” stage when the buyer presents the seller with a “letter of intent” to purchase the seller’s company.

After it is signed by both parties, the letter of intent provides a launching pad for everything that follows, through the negotiation and “due diligence” phases to the ultimate sale. To
Continue Reading Letters of intent in a business sale: 7 seller FAQs

In many cases, an S corp election can reduce each member’s tax liability.

If you are a business owner and you chose the “limited liability company” form of entity, you were probably motivated by three key characteristics of an LLC:

  • protection from personal liability for the company’s obligations;

  • relatively little formality or reporting to government entities; and

  • avoidance of double taxation.

Other popular features of an LLC are its existence as a separate legal entity, apart from the owner(s); perpetuity of existence; flexibility in management structure; and freedom in transferring financial interests.

For the purposes of this article, let’s get
Continue Reading Should your LLC be taxed as a subchapter S corporation?

A right-of-occupancy provision in your trust can satisfy two competing desires: for your adult kids to inherit your home and for your spouse to live in it.

Does this really happen?

It’s more common than you might assume. While Gordon could have updated his will and re-titled his house so that he and Blanche would own it with rights of survivorship, that might not have been what he wanted. It’s not unusual in second marriages for the spouse who owned the house to keep it in their name only – intentionally or by oversight – and have it pass to
Continue Reading Right to occupy: After your death, would your spouse be able to stay in your home?

Our online self-assessment tool can help you recognize how the passage of time and any number of triggering events can impact your will, trust, and other planning documents.

In a perfect world, you could create an estate plan and be done with it, putting it on the shelf and then waiting for it to do its thing.

But, alas, even in a perfect world, circumstances change – and it is that rascally “change” that makes periodic reviews of your will, trust and other

estate planning

documents such a good idea.

To help you evaluate the condition of your will or
Continue Reading Is it time for an estate plan review? You be the judge

Business planning is an opportunity to kill two birds with one stone: Maximize the business and personal benefits of your LLC’s operating agreement, and resolve any conflicts with your personal estate plan.

The ease of forming an LLC has been a mixed blessing, as its simplicity and relative informality has allowed for many risky shortcuts – mostly notably with respect to the entity’s operating agreement. Many organizers used a “boilerplate” agreement that was inadequate to the situation, or they skipped the operating agreement altogether (Arizona’s original 1992 LLC law did not require one).

Those shortcuts became a real issue in
Continue Reading No conflicts: Coordinating your LLC operating agreement with your personal estate plan

Our list of often-overlooked questions can help you strengthen your business succession planning and ensure a solid future for your spouse and children.

An 800-word article cannot begin to address all of the scenarios, options and decisions that may apply to your personal and business situation. Instead, we offer a few (OK, more than a few) questions that, thoughtfully considered, might provide a useful start in formulating plans for your business’s ownership and operations in case you should die while still running the show.

Consider questions such as these:

  • Are you married or single?

  • If you are married, is your

Continue Reading Estate planning for business owners: a will or trust is just the start of your ultimate plan