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AZ v. CA Tax & Estate Planning Considerations

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Below is a table comparing some of the major tax and estate planning considerations between Arizona and California that might prove useful if you have ties to both states.

Currently neither state has a state assessed inheritance tax, but there was a bill introduced in California in April of this year to impose tax on estates of $3,500,000 or more, which is considerably lower than the $11.4 million federal tax exemption.  However, in order to go into effect, it needs to pass through both houses and be put on the ballot for voters to approve.

There are considerably higher state income taxes in California both individually and corporately.

The probate threshold is describing at what amounts a probate needs to be opened with the courts.

The signatures required for a valid will are being shown.  See also our article on holographic wills in this newsletter, Why do People die Intestate?.  Arizona’s Electronic Wills Act went into effect on June 30, 2019.  There are quite a few rules around what will qualify as an electronic signature, storing it with a qualified custodian, and maintaining a verifiable electronic record.  Until the standards of practice get worked out, we’ll be sticking with paper in our office.

Statute of limitations is showing, in general, how long a creditor has to bring a claim against the deceased. There are exceptions.

The Rule Against Perpetuities concerns for how long a trust could stay valid before needing to ultimately distribute its assets or fail.

Trust Decanting sounds snazzy, but it just means laws that provide a mechanism on how to change terms of an irrevocable trust. California’s Decanting Act went into effect on January 1, 2019.

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Meet Margaret Tritch Buonocore

Margaret Tritch Buonocore began her legal career in Los Angeles as a litigator. She then moved to London where, after completing her LLM, she worked in international business and finance for almost a decade structuring corporate finance transactions, equity offerings, debt, and derivative instruments focusing on contract and securities law issues. Learn More…

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