Section 2.1 Articles of Organization Submitted to the Arizona Corporation Commission

On the day we file the Articles of Organization with the Arizona Corporation Commission we will email to the contact person for your LLC a copy of the Articles of Organization that we filed with the Arizona Corporation Commission (the “ACC”). The Articles of Organization is the foundation document that forms the Company when it is approved by the ACC. The Articles of Organization will have the following on the top left:

Arizona Corporation Commission – RECEIVED: <received date>
Arizona Corporation Commission – FILED: <filed date>

This text in the Articles means that the ACC received the Articles of Organization that we submitted on the date indicated and the ACC approved the Articles of Organization on the filed date.  The LLC was born as of the filed date.

The LLC’s ACC file number will be on the top right of the first page of the Articles of Organization.  You may never need the company’s file number, but if you need it, this is where you can find the number.

The Articles of Organization approved by the ACC is an important document. Keep it in a safe place. Third parties such as banks, lenders and title insurance companies may ask to see the filed Articles of Organization from time to time. If you ever lose your copy of the filed Articles of Organization, go to the ACC’s website, search the name of your LLC then print the filed Articles of Organization.

Section 2.2 When the New Company May Begin Doing Business

A new Arizona LLC is formed/born/created on the date its Articles of Organization are filed with the ACC.  The LLC we formed for you was born as of the filed date stamped on its Articles of Organization.  It may begin its business operations and enter into binding legal agreements as of that date. If you first obtain a federal employer identification number (see Sections 11.1 – 11.8 below for information about how to get an EIN from the IRS) for the company, you may open a bank account in the company’s name immediately.

Section 2.3 Newspaper Publication

The newspaper publication requirement only applies to new LLCs whose statutory agent’s street address is not located in Maricopa County or Pima County.  Arizona Revised Statutes Section 29-3201.G requires that all newly formed Arizona LLCs whose statutory agent’s street address is not in Maricopa County or Pima County publish a notice of the filing of the Articles in a newspaper of general circulation in the county of the statutory agent’s street address for three consecutive publications.

Section 2.4 When a Confidential Trust Owns an Interest in Your LLC

This Section applies only if I created a Confidential Trust for one or more members of the company. The Confidential Trust is not a trust that avoids probate or that is for estate planning purposes. The sole purpose of the Confidential Trust is to hold title to an Arizona limited liability company, limited partnership or corporation so that the name of the person who creates the trust and who is its sole beneficiary will not be disclosed on the public records of the Arizona Corporation Commission or the Arizona Secretary of State.

Your Confidential Trust has the following characteristics:

a. It is revocable, which means the trustmaker can amend it at any time unless you are incompetent.

b. The trustmaker may be either a single person or a married couple.

c. The sole beneficiary or beneficiaries during the lifetime of the trustmaker(s) is the single person or if the trustmakers are a married couple, both spouses.

d. The trustmaker(s) can name one or more successor trustees to take over as trustee after the death or incapacity of the initial trustee or or both initial trustees if there are two initial trustees.

e. On the death of the sole trustmaker/beneficiary, the trustee is directed to distribute all of the assets held in the trust to the estate of the deceased trustmaker or to the revocable living trust created by the trustmaker(s) for estate planning purposes if and only if that trust is named in the Confidential Trust as the beneficiary.

f. On the death of the a married trustmaker/beneficiary, the surviving spouse becomes the sole beneficiary and trustee.

g. On the death of the surviving spouse, the successor trustee is directed to distribute all of the assets held in the trust to the estate of the surviving spouse or to the revocable living trust created by the trustmaker(s) for estate planning purposes if and only if that trust is named in the Confidential Trust as the beneficiary.

h. The trustmaker(s) may add additional assets to the trust by titling the assets in the name of the Confidential Trust using the following format:

<trustee’s name>, Trustee of the <trust name> Trust dated <trust date>, and any amendments thereto

Example: If Homer Simpson were the trustee of the Laguna Beach Trust created under a Confidential Trust Agreement dated October 10, 2018, that assets titled in the name of that trust should be titled as follow:

Homer Simpson, Trustee of the Laguana Beach Trust dated October 10, 2018, and any amendments thereto

i. The Confidential Trust can be used to hold title confidentially to an Arizona corporation, LLC or limited partnership without disclosing the name of the trustmaker if the name of the trust does not contain any part of the trustmaker’s name.

j. Because the Confidential Trust is a revocable trust, it does not need a separate federal identification number (EIN) from the IRS. If the trustmaker wants to open a bank account in the name of the trust, give the bank the trustmaker’s SSAN. All income and expenses of the trust each year will be reported on the trustmaker(s) federal income tax return.

The Confidential Trust is not intended to do and does not do any of the following:

A. Provide asset protection.

B. Allow for assets to be held in trust after the death of the single trustmaker or the surviving spouse. All assets are distributed immediately after death to the estate of the deceased trustmaker or to the revocable living trust created by the trustmaker(s) for estate planning purposes if and only if that trust is named in the Confidential Trust as the beneficiary.

C. Avoid probate for the assets held in trust if the future beneficiary is the estate of the initial beneficiary.

D. Reduce or eliminate any federal or state estate or inheritance taxes on the death of a trustmaker.

If you want a trust that accomplishes any of the purposes listed in A – D, do not use my Confidential Trust. You must use a comprehensive estate planning trust instead. I can prepare such a trust, but it costs more and would require you to sign an engagement letter. See the contents and costs of my Wills, Trusts and related estate planning services.

If you would like to learn more about how to protect your most valuable asset – your family, click on this link to get our free book called “Family Asset Protection” and we will mail you a free hard copy of the book.  We will also send you an email with your user name, password and logon URL so you can access the online version of Family Asset Protection.

2.5 How to Amend Your Confidential Trust

Over time you may want to add or remove a successor trustee or change the order of the successor trustees and/or you may want to change who will inherit the trust assets when you die. If you ever need to make changes to your Trust Agreement you can hire me to prepare the amendment by submitting our online trust amendment questionnaire at:

www.arizona-wills.com/ctq

If you questions about your Confidential Trust call estate planning attorney Richard C. Keyt at 480-664-7472 or email at rck@keytlaw.com.