Jul 12, 2023 Estate Tax Attorney

Building wealth for your family’s security and for the next generation’s success takes a lifetime of hard work. The wealthiest individuals already know that they need to protect their assets from unnecessary tax liabilities, especially taxes levied on the value of their estate at the time of their death.

Estate taxes, sometimes referred to as “death taxes” can cause families to be denied very large sums of money that the deceased person intended them to receive. Ely J. Rosenzveig & Associates has been helping individuals eliminate or minimize their exposure to estate taxes by drafting effective estate plans that protect and preserve their hard-earned assets accumulated over a lifetime.

What Estate Assets Are Subject to Estate Taxes?

All the property a person owns at the time of their death will become part of their estate. The collection of real estate, personal property, and financial assets held by the decedent is overseen by an executor (if there is a Will) or an administrator (if there is not a Will) who answers, and is accountable, to the New York Surrogate’s Court.

Once the just debts and funeral expenses of the decedent are paid, including any estate taxes, the remainder of the estate will be distributed as the decedent’s last will and testament directs. If there is no will, the law of intestate succession will determine how and to whom the remaining assets are distributed.

Estate assets can include:

• Real estate
• Vehicles
• Bank and brokerage accounts
• Proceeds of life insurance policies owned by the decedent’s estate
• Personal property, including valuables such as art, jewelry, and antiques
• The value of the decedent’s ownership interests held by the decedent

Estate Assets Excluded from Estate Tax

The law excludes some estate assets from being counted toward the total estate value for estate tax purposes. Examples include any estate assets distributable to the decedent’s spouse.

Estate tax attorneys skillfully use all the lawful methods available to prevent your family from losing the benefit of assets you’ve earned through decades of hard work. One of the most successful techniques is to prevent your property from being included in your estate. That can be accomplished by creating trusts that meet your individual goals, drafting gifting plans during your lifetime, or integrating insurance policies and other instruments into your overall estate plan. Other strategies to reduce the value of your estate include annual gifting to family members or paying for their education or medical needs.

Federal Personal Estate Tax Exemption Changes

At the time of this writing, February, 2023, the federal government’s personal estate and gift tax exemption is set at a high level, $12.92 million (in 2022, it was $12.06 million). But those high levels of exempt estate values are not guaranteed to continue.

The law enacting these high federal estate and gift tax exemption levels is going to “sunset” at the end of 2025. Unless Congress acts to continue these elevated exemption levels, the federal exemption could drop back to previous levels  which, indexed for inflation, will approximate five million dollars.

How would this change in exemption level affect a person’s estate taxes?

If someone died in November 2025 with an estate valued at $9.5 million, their estate would owe no estate tax because it would be beneath the applicable exemption. But, if they died two months later, after the law that elevated the estate tax exemption sunsets, then their estate could owe the federal government estate taxes of up to 40% on the more than $4 million exceeding the reduced exemption level. The difference approaches $2 million.

These extraordinary changes in applicable law could deprive your family of substantial wealth unless you work with an experienced estate tax attorney to secure your assets from unpredictable Congressional action and other changes.

It never pays, and can be quite costly, to sit back and do nothing. Changes in your individual circumstances or changes in the law should trigger a reassessment of your current estate plan.

New York Estate Tax — U.S.’s Only State with Steep Estate Tax “Cliff”

The State of New York’s estate tax exemption level is currently set at $6.58 million. In 2022, it was $6.11 Million).  But, the estate taxing system in New York is far different from that of any other state or the federal government.

In other estate taxing systems, the only portion of the estate that is subject to the estate tax is the value exceeding the estate tax exemption level. For example, with a $12 million exemption, an estate valued at $13 million would pay estate tax on the $1 million in excess of the exemption.

But in New York State, with what is called the “NYS estate tax “cliff”, any estate with a value of more than 105 % of the New York exemption level must pay estate taxes on the entire estate and is denied the benefit of the exemption.  

Do Non-New York Residents Who Own Property in New York Pay Estate Tax?

Yes. Owners of property located in New York at the time of their death are subject to New York estate tax. The property covered by this rule includes real estate, personal property, financial assets, and “intangible personal property employed in a business, trade or profession carried on in New York State.”^[1] The presence of the decedent’s property inside the state of New York requires the estate to file a New York estate tax return.

Federal Exemption Portability v. New York State Exemption Non-Portability

Estate and gift tax exemptions are credited to individuals. But, the federal government allows a surviving spouse to use any unused portion of the deceased spouse’s exemption. This is described as making the deceased spouse’s exemption “portable” to the surviving spouse.

Estate tax exemptions for the State of New York are not portable. The surviving spouse is not allowed to take advantage of a deceased spouse’s unused state estate tax exemption.

How Ely J. Rosenzveig & Associates Estate Tax Attorneys Can Help

With many years of experience planning estate strategies to address tax issues and maximize tax savings, Ely J. Rosenzveig & Associates is a premier Westchester County Estate Tax Law Firm. Handling estate tax issues draws on our unsurpassed skill and experience.

If you are searching for a skilled Estate Tax Attorney, call Ely J. Rosenzveig & Associates. We can help you solve your estate planning issues, and assist you and your loved ones to best prepare for the future.

Our clients trust us to protect their dearest loved ones’ estate assets. Let us help you with yours.
Westchester County’s Estate Tax Attorneys

Ely J. Rosenzveig & Associates

Call 1.914.816.2900 or email us at: [email protected]

^[1] Department of Taxation and Finance Instructions for Form ET-706 New York State Estate Tax Return.