Skip to Content

We are a Veteran Owned Business, providing 20% discounts for Veterans, First Responders, Elementary and High School teachers. We remain open during the shutdown period, so please contact us to set up a phone or Zoom meeting. Taking care of you and your family, It's What We Do!

Klenk Law

New York Estate Tax Update

Posted on Sun Feb 15, 2015, on Estate Planning

Dying in New York is about to become significantly cheaper. New legislation has been enacted to increase the New York estate tax exemption over the next 5 years. Although most people never think about State estate taxes, for most estates they outweigh any potential Federal tax owed.

Currently, the Federal estate tax exemption is $5.43 million dollars per individual. After that each additional dollar is subject to a 40% tax rate.

Compare that to New York’s current exemption of only $2 million. The current estate tax rate is 16% for every dollar over $2 million. This is why experienced estate attorneys plan with the Federal and State taxes in mind.

Upcoming Estate Tax Changes

New York is increasing its estate tax exemption to keep existing families from fleeing for low or no estate tax jurisdictions like Florida. As stated above, New York’s current estate tax exemption is about $2 million, at a maximum rate of 16%. Over the next 5 years this amount will steadily increase to match the Federal exemption by 2019. Here is a breakdown of the exact numbers:

  • Today – 3/31/2015 – $2,062,500 Exemption
  • 4/2015 – 3/31/2016 – Exemption increases to $3,125,000
  • 4/2016 – 3/31/2017 – Exemption increases to $4,187,500
  • 4/2017 – 12/2018 – Exemption increases to $5,250,000
  • 1/2019 – Match Federal exemption, projected at $5.9 million

As you can see, dying in New York is about to become a lot more attractive. A person dying in 2019 versus 2014 will be able to pass on significant additional amounts to their loved ones. It is crucial to understand tax rates when estate planning. Keeping an eye on changes in state tax laws is a sure fire way to maximize the gifts you leave behind.

Let’s take a look at an example of the effect of the estate tax currently versus 2019. For this example, assume our Manhattan family has a $4 million dollar Co-Op in Manhattan and a $1.4 million dollar residence in Miami-Dade County. These are their only assets, for simplicity’s sake.

2014 Total Asset Worth = $5.4 Million

  • Federal Estate tax liability = $0
  • New York Estate Tax Liability = $320,000
  • Florida Estate Tax Liability = $0

2019 Total Asset Worth = $5.4 Million

  • Federal Estate tax liability = $0
  • New York Estate Tax Liability = $0
  • Florida Estate Tax Liability = $0

The Manhattan resident pays more than a quarter of a million dollars more in estate tax today than in 2019! This is the clear reason why so many wealthy have fled in their golden years for Florida and why New York wants to stem the flow southward.

If you need assistance with probate or with developing your Estate Plan, please call one of our Probate Lawyers or Estate Planning Attorneys for a free consultation. We have Estate Planning Attorneys in New Jersey, Pennsylvania, New York, Minnesota and Florida.

Wills, Trusts and Estates, It’s All We Do!

Tags:

New York

What Our clients are saying

Klenk Law Logo
Stars

Professional, cheerful, thorough and fast. Peter responded to my request for a consultation right away, and within just a few days my last will and living will were done. Rates are standard.

Klenk Law Logo
Stars

Klenk Law is an exceptional practice. Their fine lawyers and staff team up to produce excellent results for their clients. They excel at explaining the often cryptic laws and policies that govern estate planning right down to the complexities of the various "trust" frameworks. Peter himself manages each client together with his great team, and he has a rare quality to be both a walking encyclopedia of planning minutia and also one of the most likable lawyers I have ever had the pleasure of dealing with. He is truly generous in intellect and in his personal approach to getting the "big picture" for complex family structures. I trust him implicitly to help me make the right choices for the future. In short, Klenk Law is a gem of a firm.

Klenk Law Logo
Stars

Peter has done our family's trust and estate work since our children were born. He is not only extremely knowledgeable and honest, but makes sure that our arrangements remain current with the changing legal landscape. I would give him my highest recommendation as a professional in his field.

Klenk Law Logo
Stars

Peter was excellent. He explained everything very clearly and is super friendly. My wife and I originally tried using a lawyer through group legal coverage, but unfortunately the old adage - "you get what you pay for" - applied to the other lawyer, and we decided to go with a real professional.

Klenk Law Logo
Stars

Peter has done our family's trust and estate work since our children were born. He is not only extremely knowledgeable and honest but makes sure that our arrangements remain current with the changing legal landscape. I would give him my highest recommendation as a professional in his field.

Let us put our expertise to work for you.

Free consultation within 24 hours.