I have a friend that has parents that have over 4 million dollars in their estate, they need to know how to protect it from the IRS getting most of it. The domicile is in Arizona and also need to know which state law will preside over the estate.
2007-04-11 17:41:31 · 6 answers · asked by kcmoore1980 1 in Business & Finance ➔ Taxes ➔ United States
1. Whatever they do, the IRS won't get "most" of it. The maximum tax rate is less than 50% and the exclusion amount will currently exempt half of the estate from any tax at all and that is set to rise.
2. State law in the state of their domicile will govern how the estate is taxed at the state level. Where the property is located generally does not matter.
Their best bet would be to contact an estate planner about protecting what they have.
2007-04-11 18:35:41 · answer #1 · answered by Bostonian In MO 7 · 0⤊ 0⤋
They should definitely see an estate tax lawyer. If a decedent died this year they could transfer $2m without paying any federal estate taxes. To take advantage of each spouse's exclusion amount they can either split their assets so that $2m will pass federal estate tax-free when one spouse dies and $2m when the other spouse dies.
It is more likely that an estate tax lawyer will set up a trust, such as a QTIP, where assets equal to the exclusion amount of the year the first spouse dies will go into the trust and the other spouse can still live off the income of the trust for her life, but it will still take advantage of both spouse's exclusion amounts.
They might still have to pay Arizona state inheritance taxes. I don't know how much you can pass in AZ without paying estate tax (in Oregon it is $1m). But they can definitely save a ton of money if they invest in some estate planning!
2007-04-13 00:28:59 · answer #2 · answered by sarah_02_45123 2 · 0⤊ 0⤋
For an estate over $4 million, there would be taxes. They could avoid them by giving substantial amounts to registered charities. If they have that much money, they should be talking to a certified financial advisor about how to minimize taxes paid.
If they live in AZ, then the estate would be taxed in AZ as well as federal.
2007-04-12 01:55:08 · answer #3 · answered by Judy 7 · 1⤊ 0⤋
Contact an attorney that specializes in Estate Law. I would think that it would fall under the jurisdiction of the state of Arizona as the property is located there.
2007-04-12 00:46:03 · answer #4 · answered by Amy F 3 · 0⤊ 0⤋
Look no one likes taxes but you still have to pay taxes. There is almost no way not to pay taxes. Also, since the property is in Arizona, then they will pay Arizona state taxes and Federal (USA) taxes.
2007-04-12 00:48:12 · answer #5 · answered by AW 2 · 0⤊ 1⤋
Protect from what, inheritance tax? Try skipping generations.
2007-04-12 00:48:01 · answer #6 · answered by Anonymous · 0⤊ 1⤋