Planning For Inheritance And Estate Taxes In The State Of New York
One of the biggest questions people have when preparing their estate plan is how to plan ahead and prepare for inheritance and estate taxes. At Enea, Scanlan & Sirignano, LLP, our estate planning lawyers and elder law attorneys have over 100 years of combined experience helping clients in south-central New York prepare for their futures and preparing estate plans that fit their needs.
What Is The Difference Between Inheritance And Estate Taxes?
Inheritance taxes are assessed on the heirs and beneficiaries who receive an inheritance. The state of New York does not have an inheritance tax and there is not a federal inheritance tax. With an estate tax, the taxes come out of the decedent’s estate before the assets are distributed to the heirs of the estate.
Does The State Of New York Have An Estate Tax?
In the state of New York, if a resident of New York or a property owner in New York dies, their estate may be subject to both federal and state estate tax laws. The value of the estate will determine how much estate tax is paid. There is an exemption, capped at a certain amount. Commonly known as the New York estate tax cliff, if an estate exceeds 5% of the exemption amount that is set annually, the entire amount will be subject to an estate tax.
Is There A Federal Estate Tax?
In addition to a state estate tax, there is also a federal estate tax. The federal cap is higher than the state of New York and more is allowed for exemption. The executor of the decedent’s estate must file an estate tax return with the State of New York and the IRS.
Planning Ahead For State And Federal Estate Taxes
Depending on your financial situation and accrued wealth, there are a number of strategies that estate planning lawyers can suggest that could potentially minimize the amount of estate taxes that your heirs will have to pay. These include:
- Revocable living trusts
- Strategic gifting
- Strategic charitable giving
- Relocation out of state
Planning ahead and strategizing to avoid falling over the New York estate tax cliff is critical, especially if you have a high net worth estate. Some families even choose to relocate and move out of state to avoid paying the estate taxes in New York. An experienced wills and trusts lawyer can help you strategize what is best for your financial situation and asset portfolio.
Schedule A Consultation To Review Your Estate Plan
Our experienced estate planning lawyers at Enea, Scanlan & Sirignano, LLP, can evaluate your assets and financial wealth to help you strategize what options would be the best for your family. To schedule an appointment, send an email through our website or call our office at 914-269-2367.
