Increased Inheritance: Budget Legislation Provides Estate Tax Relief to New Yorkers

In a January 6, 2014 press release, Governor Andrew Cuomo promised estate tax reforms and other tax relief measures for New Yorkers in light of the projected budget surplus in the 2016-2017 fiscal year. In order to follow through on this promise, the 2014-2015 budget legislation raises the estate tax exclusion to $2,062,500 effective on April 1, 2014. Generally speaking, after April 1, 2014 and until April 1, 2015, estate taxes must not be paid unless a decedent’s gross estate is greater than $2,062,500. Annual increases of the estate tax exemption will continue until 2019. After 2019, the estate tax will increase based on inflation.

Prior to the budget legislation, estate taxes would be owed if a decedent’s gross estate was in excess of $1,000,000. The exclusion amount had remained at $1,000,000 for years.

As a result of this budget legislation, it is estimated that 90% of New York estates will not be subject to an estate tax. This will result in an increased inheritance to beneficiaries of those estates that would have been taxed under prior law but will not have to pay the estate tax under current legislation.

The Law Office of R. Spencer Lauterbach is a full service general practice law firm and we are happy to assist you with your estate planning and estate administration needs.

Sources:

http://www.governor.ny.gov/press/01062014-tax-relief-proposal

http://www.nysba.org/IncomeTaxChanges/