If you own an estate in the state of New York, you need to be aware of the many taxes your estate may face after you pass away. Currently, you do not owe any federal tax on your estate unless your estate is over $5.49 million.
Unfortunately, this does not mean you’re completely exempt from any taxes. You may still owe estate taxes on your New York property.
As of April 1, 2017, if your estate is worth more than $5.25 million, you may owe estate taxes. This number is set to rise in January of 2019. In 2019, the estate tax exemption will be equivalent to the federal tax amount and will continue to rise with the federal exemption amount from then on.
Understanding New York Estate Tax
Unlike other states, New York does not only tax you on the amount of the estate over the exemption amount. If the total amount of your estate is above the exemption amount, you will be taxed on the entire estate. This is frequently called the New York estate tax “cliff.”
However, if you’re leaving an estate behind for your spouse, you will not need to pay state or federal estate tax on the amount, even if it exceeds the exemption limit.
Finding the Value of Your Estate
When trying to find the value of your estate to know whether or not you’re above the exemption amounts, you’ll want to include a variety of assets and property. Things like real estate, vehicles, life insurance policies, retirement funds, and bank accounts all need to be counted in your estate.
Anything that you own at the time of your death will be considered part of your estate, even if it is in a living trust or has a beneficiary.
Talking to an estate planning attorney can help you structure your estate so that you and your family owe as little tax as possible. For help protecting your estate and creating a plan for your property and assets after you pass, contact the expert New York estate planning attorneys at Michael F. Kanzer & Associates.