New York Estate Tax

New York State’s exemption is now $3,125,000 and increased to $4,187,500 on April 1, 2016.  It will rise to $5,250,000 on April 1, 2017 and in subsequent years track the Federal exemption.

However, you cannot transfer your state exemption to your spouse.  It’s “use it or lose it.”

It is very important to note that New York has an estate tax “cliff”: once an estate exceeds 105% of the New York exemption there is no exemption at all and the entire estate (not just the excess) is taxed.

To avoid losing both exemptions, married couples must continue to use “credit shelter,” “bypass,” or “exemption” trusts as part of their estate plans.  Furthermore, a trust for a spouse ensures at least part of the assets pass to your children as you both agree, especially if the surviving spouse remarries or is a second spouse who becomes estranged from your children.

If you have any questions regarding New York estate tax, please contact Doris L. Martin, or visit our website.