Proposed Gift And Estate Tax Changes In New York

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Posted Monday, March 10, 2014 at 05:56pm EDT

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by Long Island Attorney Paul A. Lauto, Esq.

Governor Cuomo has proposed significant changes to New York’s gift and estate tax rules, that may be both good and bad for New York residents.  If these changes are approved, the effective date may be as soon as April 1, 2014.

Currently, New York’s estate tax exclusion amount remains at 1 million dollars while the federal amount is 5.34 million dollars.  That means for New Yorkers who die with a taxable estate in excess of 1 million dollars, they may be assessed an estate tax for the excess up to a top rate of 16 percent.  The good news is that under the proposed changes, New York’s estate tax exclusion amount will gradually increase over the next 5 years from 1 million dollars to the federal amount of 5.34 million dollars.  Further, the top tax rate will decrease from 16 percent to 10 percent.

A common method currently used to decrease the size of your taxable estate, is to give monetary gits to family, friends and loved ones.  As long as the monetary gift does not exceed $14,000 per person each year, one may avoid filing a gift tax return.  Therefore if you have two married children with two kids each, you may gift to them and reduce your taxable estate by up to $112,000 per year.  If you are married, your spouse may do the same, increasing the total amount to $224,000 per year.

Under the proposed changes all amounts gifted in your lifetime from Apriul 1, 2014 going forward, will be counted as part of your taxable estate.  Accordingly, if you live in New York and your taxable estate exceeds one million dollars, you should very seriously consider gifting money to your loved ones before April 1, 2014.  Failure to do so, may result in giving the government “money for nothing.”

Long Island Lawyer
Paul A. Lauto, Esq.
www.liattorney.com

Paul A. Lauto, Esq.
Paul A. Lauto, Esq. completed his undergraduate studies at SUNY at Stony Brook in 1987, with a major in political science and a double minor in socio-legal studies and moral-legal issues in philosophy. Mr. Lauto received his Juris Doctor from New York Law School in 1990 and was admitted in 1991 to practice in the courts of New York State, as well as the Eastern and Southern Districts of the United States District Court.

Mr. Lauto has primarily focused on personal injury throughout his career and previously worked as in-house counsel to a major insurance company. In 2002 Mr. Lauto established Paul A. Lauto, PLLC, with a primary concentration on personal injury, all types of accident cases, Wills, Trusts and Estates and more. Paul is the sole author of his Scales of Justice blog, which provides updates and information about current legal stories in the news and how they may affect our lives. Mr. Lauto prides himself on providing clients maximum results, with a high level of personal attorney service and attention that is uncommon in the profession. For more information please visit http://www.liattorney.com