Federal Estate Tax Exemption

The current high exemption was established by the Tax Cuts and Jobs Act of 2017. Unless Congress acts, the exemption is scheduled to revert to about $7 million per person (adjusted for inflation) after December 31, 2025. This potential reduction makes proactive planning especially important for families with estates above the projected lower threshold.

Arizona does not have a state estate tax or inheritance tax. Arizona residents are only subject to the federal estate tax. However, if you own property in a state that does impose an estate tax, that state's rules may apply to property located there.

For estates that may exceed the exemption, strategies include lifetime gifting, irrevocable life insurance trusts (ILITs), charitable giving, and family limited partnerships. These strategies should be implemented with guidance from your estate planning and financial advisory team.