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. For example, New York imposes a "pick-up" tax. 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 $1,000,000.00 even though Federal exemptions for filing are higher.  In this respect, New York does not conform to the Federal estate tax.  Typically, 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.  The New York Gross Estate will include all assets owned by the decedent at death which have a New York situs 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 what's called a "QTIP" trust, which enables a surviving spouse to avoid estate taxes that might otherwise be due when the other spouse dies. Other planning options include lifetime gifts and charitable contributions. You definitely need to consult with a qualified attorney 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 the 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 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 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