NY Estate Taxes

Saving Money on Your New York State Estate Taxes

It’s no understatement to say that New York state estate taxes are probably some of the highest and most complicated in the nation. As recognized by the New York State Tax Reform and Fairness Commission in a report issued in November 2013, New York was regarded overall as a state with high taxes. Among these taxes is the estate tax. Less than half of the states in the United States still impose an estate tax. A New York estate tax lawyer can explain how the tax will apply to your situation.

A New York State estate tax return must be filed within nine (9) months after the decedent’s death. The New York State filing threshold is equal to the New York estate tax exemption which for the period April 1, 2014 to March 31, 2015 is $2,062,500. This exemption is expected to increase over time until 2019 when it should equal the Federal estate tax exemption which will be approximately $6,000,000 at that time. Generally, the New York Gross Estate and the New York Estate Tax Deductions do conform to the Federal Estate Tax provisions. Thus, New York allows deductions for all assets passing to a surviving spouse (the “marital deduction”) and also for estate administration expenses such as funeral expenses, appraisal costs and fiduciary commissions. Generally, the New York Gross Estate will include all assets owned by the decedent at death such as all bank accounts, brokerage accounts and New York real estate.

Are there ways to save on estate taxes? Yes. A common one is to utilize a combination of the exemption amount and marital deduction to avoid estate taxes that might otherwise be due when either spouse dies. Other planning options include lifetime gifts and charitable contributions and a Federal concept known as Portability. You definitely need to consult with a qualified estate tax lawyer to minimize New York state estate taxes.

Preparing a New York Estate Tax Return can be very time consuming and complex. Although both the New York and Federal estate tax returns are required to be filed nine (9) months after a decedent dies, a six (6) month extension to file can be obtained. The taxes due should still be paid within nine (9) months to avoid possible interest and penalty charges.

The estate tax return reflects all of the aspects of Estate Settlement such as the decedent’s assets, debts, claims and estate administration expenses. The return contains various schedules into which the appropriate information is inserted. For example, one schedule requires that the decedent’s real estate be described and the date of death value provided. Another schedule asks for information regarding funeral and other expenses such as executor’s commissions. It is important that all of the information contained in the return be verifiable by means of qualified valuations such as appraisals and bills and receipts.

The New York State Department of Taxation and Finance also issues a form called a Release of Lien. This document is needed when the estate is selling an asset such as a cooperative or condominium apartment or real property. An application must be filed with the Department setting forth the estate’s estimated tax liability. The Release of Lien form indicates that the property can be transferred free of any tax lien that may be imposed on account of the New York estate tax.

Are you looking to save on your estate taxes? I have many years of experience as a New York estate tax attorney working with and advising clients in the creation and implementation of plans that provide tax advantages and security for your family and beneficiaries. Regardless of the size of an estate, you can benefit greatly from having a well-prepared estate plan consisting of documents such as a: Last Will, Health Care Proxy, Power of Attorney and Living Will.

Do you need a lawyer or have any questions? Contact me by phone at (212) 355-2575 or by e-mail for an appointment with an estate tax attorney in New York.