New Basic Estate Tax Exclusion in New York State

January 5, 2015

This edition of the Koldin Report E-Newsletter reviews how New York has recently changed the basic Estate Tax exclusion. The Federal Estate Tax exclusion for 2014 is $5,340,000. For those passing away in New York State prior to April 1, 2014, the Estate Tax exclusion was $1,000,000. Under the new law, the basic Estate Tax exclusion in New York is changing as follows:

  • Date of Death on or after April 1, 2014 and before April 1, 2015: $2,062,500
  • Date of Death on or after April 1, 2015 and before April 1, 2016: $3,125,000
  • Date of Death on or after April 1, 2016 and before April 1, 2017: $4,187,500
  • Date of Death on or after April 1, 2017 and before April 1, 2019: $5,250,000
  • Thereafter, indexed for inflation However, this new law has a "Cliff."

If your total estate on death is more than 105% of the basic exclusion amount, you lose the entire basic New York State Estate Tax exclusion and your Estate is taxed on the entire amount. Furthermore, any gifts you make within 3 years of death (if not otherwise includible in your federal gross estate) is added back to your Estate for New York Estate tax purposes except for (1) gifts made when you are not a resident of New York State, (2) gifts made before April 1, 2014, (3) gifts made after December 31, 2018, (4) annual exclusion gifts which in 2014 is $14,000 per done, and (5) payments made directly for tuition or medical expenses.

If you and your spouse have a total combined estate of more than the New York basic Estate Tax exclusion, then you may want to consider certain types of tax planning such as having each spouse establish his/her own separate revocable or irrevocable living Trust to split your estates and avoid probate. If you and your spouse already have separate Living Trusts and your estates are now below these new basic Estate Tax exclusion amounts, you may want to consider combining your Trusts into a single joint Trust.

At the Koldin Law Center, P.C. with offices in Syracuse and Rochester, New York, we have over 40 years of experience helping individuals plan for immediate crisis and long term care. You should never assume that it is too late. Quite often you have legal options to save some or all of your life savings. The Koldin Law Center, P.C. can help you make the right decisions when you have a health care crisis. There is something you can do.