Estate Planning Isn’t Just For The Elderly

New York Estate Planning And Gifts To Minimize Estate Tax Implications

Gifting money and assets is a common strategy for distributing assets and wealth in advance, and as a way to minimize estate tax implications. At Enea, Scanlan & Sirignano, LLP, our wealth distribution attorneys have over 100 years of combined experience with estate planning and preparation for clients throughout south-central New York State.

Are Monetary Gifts Taxed In New York?

In the state of New York, a decedent’s estate has to pay state estate taxes in addition to any federal taxes that are imposed. However, in the state of New York, the net value of a gift is exempt (up to a certain amount) from taxes, annually, as income to the recipient. Therefore, gifting money is an excellent way for high-net-worth individuals to begin distributing their wealth and assets in advance.

In addition, each spouse counts separately for purposes of the gift tax law. Thus, if an individual gifts less than $15,000 or a married couple gives less than $30,000 to each of their children, they can start to distribute their wealth in advance without worrying about tax consequences.

What Is The Lifetime Gift And Estate Exemption?

In the state of New York, there is a limit with respect to the total value of gifts that an individual can receive over the course of their lifetime. If an individual or couple chooses to give a gift that goes above and beyond the annual exemption, the recipient may be required to file and pay a gift tax return. While no actual gift tax is due, the amount is reported and will ultimately be deducted from their lifetime gift and estate tax reduction.

The New York Clawback Rule

In the state of New York, if a person passes away, the state can and will “clawback” the previous three years of that individual’s asset and monetary gifts and include the value of those gifts in the estate’s tax assessment and counted for tax purposes. In other words, the sooner monetary gifts are given as an attempt to distribute wealth and minimize the estate tax consequences, the more you will be able to give to your loved ones without worrying about estate tax implications.

Questions About Gifts? Schedule An Appointment With A Wealth Management Attorney.

At Enea, Scanlan & Sirignano, LLP, we understand that the estate tax implications are complicated and there can be a lot of questions about the tax implications of gift giving as a way to distribute your wealth. Our wealth management attorneys are available for consultation appointments. To schedule, call our office at 914-269-2367 or send an email through our online form.

Enea, Scanlan & Sirignano, LLP