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Death Taxes
for New York State Residents
Mark S. Eghrari Estate Planning Attorney
People who live in the United States must be aware of the existence of the federal estate tax. The event that triggers the tax is your death, and this is why the estate tax is often referred to as the "death tax."
As a result of provisions that were contained within the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 the federal estate tax exclusion was set at $5 million in 2011. This figure rose to $5.12 million in 2012 when an inflation adjustment was applied. In 2013 yet another adjustment has set the federal estate tax exclusion at $5.25 million. The maximum rate of the tax was 35% in 2011 and 2012. After the most recent tax relief act (the American Taxpayer Relief Act of 2012) was passed the top rate went up to 40% for 2013.
In addition to being subject to the federal estate tax we also have an estate tax on the state level here in the Empire State. It is a progressive tax, and this means that the rate of the levy is dependent upon the amount of money that is being transferred to the heirs of the deceased. At the current time the maximum rate of the New York state estate tax is 16% and the exemption is $1 million.
the federal level, so the unlimited spousal exemption is not applicable to those involved in same-sex unions.
Marital Exemption
There is an unlimited marital New York estate tax exemption for transfers between spouses. Unlike the federal estate tax, because of the passage of the Marriage Equality Act this does include married same-sex couples in the state of New York.
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Conclusion
Though death taxes can erode your wealth considerably, there are many different legal steps that can be taken to mitigate your exposure.
In this report, we'll show you WHY you need an estate plan and more importantly, all the things a good plan can do for you and your loved ones.
Each case is different, and the optimal way to proceed will vary depending on the exact circumstances. Implementing the appropriate tax efficiency strategies with the assistance of an estate planning attorney who has a thorough understanding of the tax code is the key to wealth preservation. In addition, the laws are always subject to change, so an individual could be exempt from the tax one year and exposed the next. It is important to recognize this and develop an ongoing relationship with your attorney so that you can make adjustments to your existing plan if and when they become necessary.
References
Forbes http://www.forbes.com/sites/deborahljacobs/2013/01/02/afterthe-fiscal-cliff-deal-estate-and-gift-tax-explained/ Wall Street Journal http://online.wsj.com/article/SB10001424127887324235104574 3461964155832.html New York State Department of Taxation and Finance http://www.tax.ny.gov/pit/estate/etidx.htm New York State Estate Tax Return ET-706 http://www.tax.ny.gov/pdf/current_forms/
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. Eghraris 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. Mr. Eghraris expertise is in providing unique and innovative estate planning solutions that create a secure future for his clients and their loved ones. Mr. Eghrari is a member of the American Bar Association and New York State Bar Association as well as the National Academy of Elder Law Attorneys and the American Academy of Estate Planning Attorneys. 50 Karl Avenue, Suite 202 Smithtown, NY 11787 Phone: (631) 265-0599