Arizona Estate
Tax Calculator

Arizona does not impose a state-level estate tax or inheritance tax. The state constitution was amended in 2006 to prohibit any future estate tax without voter approval, providing lasting certainty for Arizona residents and their advisors.

Arizona estates face only the federal estate tax, with its current exemption of approximately **$15 million** per individual.

Arizona's constitutional prohibition on estate taxes distinguishes it from states that merely repealed their estate tax legislatively — the barrier to reimposition is significantly higher. This makes Arizona a favored destination for retirees and high-net-worth individuals seeking estate tax certainty.

Arizona residents deal only with the federal estate tax. The **$15 million** exemption (2025) with portability allows married couples to shelter up to $30 million.

The federal top rate is **40%**. No state-level filing or payment is required.

Arizona's community property status means that upon the first spouse's death, both halves of community property receive a stepped-up basis under IRC 1014(b)(6). This is a major income tax advantage compared to common-law states, where only the decedent's half receives a step-up.

Factor this benefit into the overall estate plan.

As a community property state, Arizona requires careful characterization of assets. Property brought into Arizona from a common-law state retains its character unless transmuted by agreement.

Those who relocated to Arizona should review all asset titles and consider a community property agreement to ensure full basis step-up benefits.

Arizona's beneficiary deed statute (A.R.S. 33-405) allows real property to transfer outside probate via a recorded beneficiary deed.

While not directly an estate tax tool, beneficiary deeds simplify administration and can be combined with other planning techniques. Arizona also has no state capital gains tax surcharge, making it favorable for post-death asset liquidation.

Even without a state estate tax, Arizona estates near the federal threshold need planning. Use this calculator to estimate federal liability and model community property step-up benefits.

Free for all 50 states plus DC.

Because Arizona does not impose a state estate tax, the federal estate tax is the only transfer tax layer. The current federal exemption of $15 million per individual (2025) shelters the vast majority of estates.

However, estates that exceed this threshold face a top marginal rate of 40%, making federal planning essential for high-net-worth Arizona residents.

The Tax Cuts and Jobs Act (TCJA) doubled the federal exemption effective 2018, but this increase is scheduled to sunset after 2025. If Congress does not act, the exemption will revert to approximately $7 million (adjusted for inflation).

For Arizona residents with estates between $7 million and $15 million, this sunset creates a planning window: transfers made now under the higher exemption will not be clawed back, even if the exemption later decreases.

The absence of a state estate tax in Arizona simplifies the analysis — there is no gap between state and federal exemptions to navigate, no separate state return to file, and no risk of double taxation. However, this also means there is no state-level deduction to offset federal liability.

Federal planning tools — marital deductions, charitable deductions, and the unified credit — carry the full weight of estate tax mitigation. Use the Arizona estate tax calculator to model current and post-sunset scenarios, and review the Arizona probate cost calculator to understand full settlement costs.

Federal portability allows a surviving spouse to inherit the deceased spouse's unused estate tax exclusion (DSUE), effectively doubling the available federal exemption to $30 million for married couples. Electing portability requires filing Form 706 for the first-to-die spouse, even if no federal estate tax is owed — a step that is frequently overlooked when no tax appears to be due.

Because Arizona does not impose a state estate tax, there is no state-level portability concern. The federal election is the only one that matters, and it applies automatically to the surviving spouse's estate once made.

This is simpler than in estate-tax states, where the lack of state portability forces the use of bypass trusts to preserve both exemptions.

Despite this simplicity, portability has limitations. The DSUE amount is not indexed for inflation — it locks in at the value of the first spouse's unused exemption at the date of death.

If the surviving spouse remarries and the new spouse dies, the DSUE from the first spouse is lost. For Arizona families with significant wealth, bypass trusts may still be preferable to portability because they provide asset protection, generation-skipping benefits, and inflation-adjusted growth outside the surviving spouse's taxable estate.

Use the executor fee calculator and probate cost calculator to understand the full administration picture when comparing trust structures.

Without a state estate tax, Arizona residents focus planning efforts on the federal layer. The current $15 million exemption provides substantial shelter, but the scheduled TCJA sunset makes it prudent to accelerate planning.

Irrevocable trusts — including ILITs, SLATs, and QPRTs — remove assets from the taxable estate permanently. Once transferred, these assets and their future appreciation are outside the federal estate, regardless of future exemption changes.

Annual exclusion gifts of $19,000 per recipient (2025) remain the simplest estate reduction tool. Married couples can jointly gift $38,000 per recipient through gift-splitting.

Over a decade, a family gifting to four beneficiaries annually removes $1.44 million from the estate with no gift tax return required. Charitable deductions — whether through outright bequests, donor-advised funds, or charitable trusts — further reduce the taxable estate while supporting philanthropic goals.

GRATs and GRUTs (grantor retained unitrusts) transfer appreciation to beneficiaries at minimal transfer tax cost. For Arizona residents holding concentrated stock positions or rapidly appreciating assets, these vehicles are particularly efficient.

Family limited partnerships and LLCs may provide valuation discounts for gift and estate tax purposes, though the IRS scrutinizes these structures closely. Professional valuation and proper documentation are essential.

Model your federal exposure with the Arizona estate tax calculator, or find an estate planning attorney in Arizona for personalized guidance.