Blog for John Sweeney - Elder, Wills, Estates, Trusts, Special Needs, Business, & Tax Lawyer in CT and NY

New York Estate Tax Law Changes

Posted by John Sweeney | Apr 11, 2014 | 1 Comment

NY used to be a very expensive place to die.  As of March 31, less so.

The federal law allowed you to pass $5.25M tax free.  NY was only at $1M.  NY topped that off with estate tax rates that hit 16%....making it a very expensive place to die.

The new law raises the NY amount you can pass tax free to the federal amount of $5.25M;  phased in through 2019.   However, the actual estate tax rate remains a healthy 16%.

As usual, nothing is simple in New York.  While they raised the exclusion to $5.25M, they turned around and put in a provision that claws it back quickly if your estate is over the $5.25M amount.

In addition, they added some other provisions to increase revenue.  They added a 3-year look back period for gifts made between April 1, 2014 and Jan. 1, 2019.  Specifically, if a NY resident dies within three years of making a taxable gift, the value of the gift will be included in the decedent's estate for purposes of computing the NY estate tax.

The bottom line is that law will eventually eliminate the gap between the NY and federal estate tax exclusion amounts.  However, for the next five years, the exclusion amount increases and a 3-year look back for taxable gifts is in place, making planning more complex.  It's important for NY residents to review their estate plans to ensure they take these changes into account.

For a more detailed discussion, see the NYSBA summary of the law changes.

Connecticut remains an expensive place to die too, with only a $2M exclusion and rates up to 12%.

About the Author

John Sweeney

John is an experienced lawyer who helps you solve your problems. He practices Elder, Wills, Estates, Trusts, Special Needs, Business, & Tax Law in Fairfield County CT and Westchester County New York. He brings a wealth of experience in law, business, tax, insurance, and finance to arrive at practical solutions with compassion and care. Honest, direct and practical, he is focused on you and your problems. He also brings a wealth of personal experience from his own large family and aging parents.


Crasnic Reply

Posted Mar 14, 2015 at 09:14:34

Dear Worried Reader, On February 8, 2006, President Bush signed a law claled the Deficit Reduction Act of 2005. This law makes sweeping changes to the ability of seniors to transfer (gift) any assets to their children and grandchildren. Following the advice of any book written before that date can cause a catastrophic loss of Medicaid privileges when a senior citizen is most vulnerable..when they actually enter a nursing home. Do not use this book as a reliable guide to current law. elder law attorney Chicago, IL

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Elder, Wills, Estates, Trusts, Special Needs Tax & Business Law; Attorney John Sweeney

Sweeney Legal, LLC, provides legal, practical, and business counsel to Seniors, families, and businesses in the Fairfield, Connecticut area, including the communities of Bridgeport, Bethel, Brookfield, Danbury, Darien, Easton, Fairfield, New Canaan, Newtown, Norwalk, Redding, Ridgefield, Stamford, Weston, Westport and Wilton. John is also licensed in New York serving Westchester County including the towns of Bedford, Lewisboro, Mount Kisco, North Salem, Pound Ridge, and Somers.