Does Arizona Have An Inheritance Tax?

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Does Arizona Have An Inheritance Tax?

Does Arizona have an Inheritance Tax? or Do I have to pay a heritage tax on Arizona? As a law firm in Phoenix, Chandler, and Mesa that specializes in estate planning, this is a problem we frequently hear in Phelps Law. So in this article, you will find all the details about the Inheritance tax and other laws related to the Tax.

Our equity programs for you and your heirs are tailored to protect your assets and minimize tax exposure. There are two sets of laws on the issue with respect to inheritance tax: national and state. Federal tax exemption Sometimes, the federal property tax exemption can vary. It is now priced at $11,400,000.

This implies that if your estate is valued at less than $11,400,000 upon death, your beneficiaries will not have to pay federal taxes on your inheritance in the national amount. Although Arizona has no property tax, the federal government still levies its own tax.

Accounting process

Those places in the U.S. worth more than $5.49 million in 2017 have to pay inheritance tax. Due to inflation, that exemption rate is subject to change.

What Are The Other Related Information About Heritage Tax: Does Arizona Have An Inheritance Tax?

The federal heritage tax currently stands at around 40%. That is not something to worry about for many people. 99.5 percent of the property is not subject to any federal gift or property tax.

If you’re still worried about paying an inheritance tax, you’ll find additional exemption and deduction amounts that should exacerbate your fears about paying a federal inheritance tax more. Have federal property taxes. However, for a married couple, the tax amount is double the federal limit, nearly $11 million.

The surviving spouse is getting huge tax relief. If your partner died without using all of your tax exemption, the surviving partner is entitled to use what remains in addition to your personal exemption. 

Charitable Deduction: 

Part of your property will be tax-exempt if you leave property to a charity. That part of your estate will not be included in the tax exemption for your estate. 

Trust In Life Insurance: 

When you create a life insurance trust, the proceeds of your life insurance are taken from your estate. 


You can give your property as gifts if you really want to avoid estate taxes. Donations of less than $14,000 per annum are tax-exempt and do not count towards your exemption amount. If you keep doing that for a decent period, this can build up quickly.

Inheritance taxes

Therefore, all the money spent on medical or college expenses for an individual is tax-exempt. Arizona Estate Tax The property tax has no longer been paid in Arizona since 2006. There are, however, countries that levy a State-level inheritance tax.

If you have a property in these countries, or if you have heirs residing in one of these states, then Does Arizona have an Inheritance Tax? Yes, the tax may apply to your estate and inheritance. Retirement can create various tax hurdles. In the event that you have a beneficiary named in these accounts, you may be taxable.

Phelps Law offers a revolutionary new solution: the IRA Trust for Inheritance. It is a revocable asset that you list as your retirement account’s primary or secondary beneficiary. You still have power, and the trust will extend the minimum taxable distributions to your heirs if you die.

This will hold the retirement accounts stable for a longer period of time. Investment income If your property includes income-generating assets, your heirs may want to pay taxes when handling the property on the income earned from those investments.  

The same could be true for land whose value has increased before the liquidation of the property from the moment of his death. Annuities that are tax-protected are also subject to income tax on income earned while retaining the annuity. Such annuities are tax-deferred and do not have tax exemptions. 


We hope that this analysis has been useful in giving you a very simple idea of the inheritance tax problems in Arizona. Enter the query for a more complete explanation and to find the best solution to your situation. Your first consultation is free in the Law on Phelps.

Our experts are fully knowledgeable of current tax laws and we will be happy to assist you with all of your requirements for estate planning.

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