What is an estate freeze?
An estate freeze, also known as a freeze and hold, is a planning technique used in Arkansas to help manage inheritance tax. This technique involves transferring ownership of or freezing ownership of assets such as stocks, real estate, and investments. The intent of this strategy is to limit the amount of taxes that will need to be paid on the estate’s assets if and when the owner passes away. An estate freeze can be beneficial in two ways. First, the transferred assets will appreciate while the current owner retains control over them. Secondly, the freeze will freeze the current value of the asset, meaning that any future appreciation won’t be subject to estate tax. The estate freeze works by transferring ownership of assets to another entity, such as a trust. This trust can then be used to pass the assets on to children or other heirs. The trust can also be used to manage investments and protect assets from creditors. By freezing the assets, estate taxes can be greatly reduced or even avoided entirely. This technique allows an owner to transfer ownership of assets while still having control over them. Although estate freezes can help to reduce taxes, they are complex and should not be attempted without the help of an experienced lawyer.
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