New York estate tax can take a big chunk out of the value of an estate and can impact the legacy that you hope to leave behind for your beneficiaries or your heirs. If you are making your estate plan, you need to understand what the New York rules are for estate taxes and you need to understand what the rates are that your estate will be taxed at if taxes are due. If your loved on has passed away in New York and you are concerned about the way in which estate tax will affect your inheritance, you also need to know what state laws require.
Mark S. Eghrari & Associates PLLC can provide you with help in understanding the New York estate tax. We can explain the tax rate, the rules under which estates in New York are taxed, and the circumstances where taxes are assessed. We can also help you to explore all possible approaches to reducing or avoiding estate tax so an inheritance can be as substantial as possible. Give us a call today to find out more about the ways in which our legal team can help you with all tax issues related to both NY and federal estate tax laws.
What is the New York Estate Tax Rate?
The New York State Department of Taxation and Finance explains estate taxes within New York. New York has its own state-specific estate tax rules applicable to those owning property within the state, as compared with the federal government who has uniform estate tax rules nationwide. When a person passes away and lives in New York or owns property in New York, it is possible that both the state and federal government will assess estate taxes.
Estate taxes in New York have to be paid once the value of the estate exceeds the basic exclusion amount (BEA). The BEA is the amount of excludable property that can be transferred on to new owners without estate taxes being triggered. Between April 1, 2016 and March 31, 2017, this BEA amount is $4,187,500. After April 1, 2017, the amount will be $5.25 million.
If your estate is larger than this amount, consulting ET-706 becomes necessary to determine what your actual tax obligation is. This form has a chart showing tax rates. For example, if your estate is valued at between $7.1 million to $8.1 million, the tax owed would be $650,000, plus 13.6 percent of the value of the taxable estate in excess is $7.1 million.
If your estate was $7,200,000, this means that you would owe $650,000 plus taxes on 13.6 percent of ($7.2 million – $7.1 million) Doing this calculation would mean you owe $100,000 plus $650,000 or a total tax of $750,000.
Will You Have to Pay New York Estate Tax?
Understanding the New York estate tax rate is complicated, since differing amounts are owed and differing percentages are assessed based on a variety of factors. You need to make certain that you know if you death is going to trigger estate tax. With this knowledge, you can work with a New York estate tax lawyer to find different ways to transfer assets after your death without losing a good amount of their value to a big government bill.
Your New York estate tax lawyer will provide assistance not just with trying to limit or avoid New York estate taxes, but also with trying to reduce or avoid federal estate tax. Tools like trusts and the strategic giving of inter vivos gifts (gifts during your lifetime) can help you to avoid having to pay taxes on some or all of your estate. This can be especially important if you have a lot of illiquid assets like property to transfer to heirs but are not leaving a lot of money that will be available for the estate to pay taxes. If you have not made advanced plans under these circumstances, your heirs could end up forced to take a loan or sell their legacy.
Getting Help from A New York Estate Tax Lawyer
A New York estate tax lawyer can provide invaluable assistance with understanding tax rates and with making smart choices about how to make an estate plan that addresses tax issues. We represent individuals who are planning ahead to provide a legacy for loved ones through a comprehensive estate plan. We also offer assistance to those whose loved ones have passed away and who are going through the probate process.
To find out more about what a New York estate tax lawyer can do for you, give us a call at (631) 265-0599 or contact us online to speak with an experienced member of our legal team to learn more.