What is an estate freeze and how does it work?

An estate freeze is a tool used in estate planning to help protect assets from the effects of inflation, taxation, and other negative influences. It is used to help preserve and pass on wealth to future generations. In Texas, an estate freeze works by transferring appreciated assets (such as stock, real estate, or other investments) to a trust or legal entity. This transfers the appreciation potential of the asset from the trustee to the beneficiary, allowing continued appreciation of the asset and protecting it from future taxation. In addition, the estate freeze either locks in the value of the asset at the time of transfer or sets the value as of the date of the freeze. This helps to protect both parties from the effects of inflation or other economic changes. The estate freeze can also be used to protect assets from creditors and other claimants. To set up an estate freeze, an executor must draft a legal document that details the specifics of the agreement, including who controls the asset and when it can be transferred or sold. Additionally, beneficiaries will need to be identified in the document. Then, the parties involved will need to sign the document and file it with the county clerk in the jurisdiction where the asset is located. An estate freeze can be a great tool for estate planning, allowing you to pass on wealth to the next generation. By protecting assets from the effects of inflation, taxation, and other external forces, it can help to ensure that your wealth is passed on to future generations.

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What is an estate freeze and how does it work?

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