People are moving to new states in order to save their family money when they pass away. Take, for example, the wealthy man highlighted in Forbes’ recent report about state-to-state variations in estate laws. He’s changing his residency from New Jersey to New York because of recent changes in the latter’s estate tax regime.
Forbes went a little further by actually listing the nineteen states that will assess taxes against residents who pass away during 2015. They call it their “Where Not to Die” list. We’re happy to report that Arizona isn’t on it.
Actually, prior to January 1, 2005, Arizona did assess its own estate tax. Better known as the “pick-up tax,” it was based on the amount the deceased owed under existing federal estate tax laws. Generally speaking, Arizona’s cut came out of the IRS’s share of the estate, so the individual’s overall liability didn’t increase.
The federal government passed new legislation in 2004, however, wiping out the pick-up tax in Arizona and everywhere else. A handful of states opted to enact their own, separate tax scheme as a result, but Arizona chose to spare its residents.
Additionally, Arizona doesn’t impose its own inheritance or gift tax.
Unfortunately, these things are still assessed at the federal level, which means Arizonans aren’t entirely off the hook. We may have avoided Forbes’ “Where Not to Die” list, but there’s no escaping the federal estate tax.
Fortunately, an experienced Phoenix estate planning attorney can help you put together a plan now that will save you and your family a lot of money down the road… and you won’t even have to move to New York to do it. Call the attorneys at Kamper, Estrada & Simmons, LLP to learn more today.