Long Island Elder Law & Estate Planning

The passage of the New York Marriage Equality Act back in 2011 had some profound implications from an estate planning perspective.

Here in New York we have a state estate tax, and in 2013 there is a $1 million exemption. So, assets that you have that exceed $1 million in value are taxable as you are transferring them to your heirs.

However, there is an unlimited exemption between spouses. As a result, same-sex couples that are legally married in the state of New York can take advantage of this unlimited state level estate tax exemption between spouses.

This is certainly a good thing for successful married gay couples that reside here in New York. However, there is another layer of taxation to be concerned about.

The federal estate tax has a considerably higher exclusion at $5.25 million per person in 2013. That is the good news.

The bad news is that because of the federal Defense of Marriage Act (DOMA) same-sex marriages are not recognized on the federal level.

As a result, the unlimited marital federal estate tax exemption that is afforded to married couples does not extend to gay couples who are legally married in the state of New York.

If your estate is in taxable territory on the federal level as a gay person who is married you would do well to discuss tax efficiency strategies with an expert.

The federal estate tax carries a hefty 40% maximum rate, and it can significantly erode the value of your legacy if you do not take steps to preserve your wealth.

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About Eghrari Wealth Training Law Firm

Mark S. Eghrari is an attorney in private practice in Smithtown, New York. He has been in practice since 1988. Mark S. Eghrari provides extensive estate and tax planning services to individuals and businesses. Mr. Eghrari’s primary focus is helping clients avoid probate, minimize or eliminate Federal and State Estate taxes and protect their assets from the high cost of nursing care, if they become ill.