Both the federal government and New York State impose a tax on property that you pass at death. However, in both cases there is a high exemption (New York State had over $5.4 million and federal $11.58 million for 2020). This means most people do not pay an estate tax. However, especially if you're in the ballpark for owing NYS estate tax, special planning is needed because if you exceed the exemption by more than 5%, the tax is due on the full estate, not just the amount above the exemption.
Both the federal government and New York State impose an estate tax on assets you pass at death. Under the federal estate tax system, you can make up to $11.58 million for 2020 in gifts during life (and at death) and not pay an estate tax. In New York State, the amount exempt from tax is $5.85 million for 2020. Both amounts are adjusted annually.
Under federal and state rules, there are some breaks:
When taxes do kick in, they are hefty. The federal estate tax rate is 40%, and New York State has graduated rates to 16%. In my experience, tax planning is especially important for single people who cannot take advantage of the "unlimited marital deduction" and for anyone who has wealth levels that would subject them to tax.
It's important to get your documents in order with any business or estate planning. Contact the law firm of Susan G. Parker Law Associates, P.C. at (914) 923-1600 to help you organize and plan.