A large component of asset protection planning is designed to help protect your business and investment assets from claims by your personal creditors. If you have a corporation and a creditor gets a personal judgment against you, the creditor can seize the stock of your corporation. If you are the sole owner and your business is held in a corporation, it can be taken over and operated, managed or dismantled by your personal creditors.

Because of these risks, some business owners have both their business and/or investment assets held in a limited liability company (“LLC”). Under Arizona law, your personal creditors may not be able to seize your membership interest in the LLC, which will be discussed in detail in this article. Additionally, there are substantive matters to consider before your LLC is structured that could further limit a creditor’s ability to reach your assets.