What is an estate freeze?
An estate freeze is a type of inheritance law strategy used in Maine and other locations to help reduce the estate taxes on an inheritance and protect its value for future generations. In an estate freeze, the original assets held by the estate are converted into something different, typically something with a higher value. This new asset or “freeze” can then be passed down to heirs of the estate without the old tax burden associated with the original assets. An estate freeze can take many forms, such as transferring the original assets into a trust or using them to purchase life insurance policies. In each case, the original assets are converted into something with a higher value in order to reduce the tax burden on the estate. The new value is then retained and protected for future beneficiaries. By freezing the estate in this way, the heirs can avoid the estate taxes imposed on the original assets and receive more of the inheritance. Estate freezes can be a useful tool for those in Maine and other locations who are seeking to maximize the value of their inheritance for future generations. By reducing the tax burden and protecting the assets, an estate freeze can help to ensure that heirs receive a larger portion of the estate.
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