Estate Tax Planning
Estate tax planning can make all the difference for your loved ones and/or beneficiaries after you pass away.
By setting up your estate preservation plan correctly, you may be able to save your family from a financial headache and the heartache of losing what you want to leave them.
Contact us today to set up a session with an experienced estate tax planning attorney in Arizona that understands the ins and outs of local and federal elder laws and estate planning.
What Is an Estate Tax?
An estate tax is a percentage taxed on the income and assets you have accumulated by the date of your death. It is also known as a death tax. Arizona does not have an estate tax. The Federal government, however, may charge an estate tax if your total assets equal more than $12.92 million for 2023.
This means that on the federal level, if your estate is valued at less than $12.92 million when you die, your beneficiaries will not have to pay any federal tax on their inheritance. If your estate is valued above that amount, you’ll only be taxed on the amount that exceeds this number.
This federal estate tax must be paid within nine months after your death–on top of your funeral costs and other costs from your end-of-life care. For many families, this amount is completely out of the question, and can lead to important, meaningful inheritance being lost.
Wonder Who Pays the Estate Taxes When the Deceased Is Gone?
Your loved ones and/or beneficiaries will be in charge of taking over this payment.
What If Your Estate Is Short of This Amount at the Present Date?
Just because your estate would not qualify for a federal estate tax now doesn’t mean that it won’t apply in 5, 10, or 20 years. If your estate grows exponentially before your death, you may be in danger of having to cover the estate tax.
Many events can happen between then and now that may render you incapable of setting up your estate the way you wish before it’s too late.
How to Avoid Federal Estate Tax
There are many ways that you can avoid making your family pay for an estate tax on their own inheritance.
- You can sell certain assets to an irrevocable trust. This trust will still be within your control.
- Your family can form family limited partnerships or limited liability companies (LLCs) to protect your assets.
- You can set up dynasty trusts, personal residence trusts, asset protection trusts, and life insurance trusts.
Of course, your estate planning attorney will have to look into your current financial state and determine which of the above options best suits your best interests. Without an attorney, you’d be left to research these options on your own, and hope for the best and your family is set up for success when you are gone.
Contact an Experienced Arizona Estate Lawyer Today
Estate tax planning doesn’t have to be an intimidating or scary process. Rather, with a knowledgeable estate planning lawyer working with you, you will be able to rest assured that your best interests are being represented in all documentation.
Don’t let worrying about your estate affect the later years of your life. Instead 602-667-7777, or click to chat to begin your Arizona estate tax planning journey today.