Over the years as a highly experienced New York City estate planning lawyer, I have seen the New York State Estate Tax go from being the worst in the nation to the best. Historically NYC estate planning lawyers had to create often costly estate tax avoidance strategies for affluent clients. For as long as I could remember theNY Estate Tax applied a sliding scale tax rate of between 6-16% on any and all estates with assets valued at $1 million or more. With inflation and the ever increasing housing market in New York City even modest middle income families are subjected to dreaded estate tax liability.
However, on April 1, 2014 New York’s Legislature literally overhauled the oppressive New York Estate Laws overnight. Pursuant to those changes, under the current NY Estate Law an individual may now pass $2,062,500.00 free of the cumbersome New York State Estate Tax. Additionally, if married spouses structure their estates properly with the help of an experienced New York City Estate planning Lawyer they can pass up to $4,125,000.00 without owing a single dime in New York Estate Tax Liability.
For any New York City estate clients thinking about planning their estates, trust formation and complex estate planning is now obsolete for all but the very wealthy. To make matters even better the New York State Legislature did not stop there. The New York State Legislature went a step further enacting an annual rate schedule for inflationary purposes thus raising the excludable amounts of estate assets annually to adjust for inflation.
Date Enacted Individual State Estate Asset Exemption
April 1, 2015 $3,125,000.00
April 1, 2016 $4,187,500.00
April 1, 2017 $5,250,000.00
This is a New York City Estate Planning Lawyer’s wildest dream. For the first time married couples in New York State are able to pass significant amounts of their hard earned NY estate assets free of estate tax liability. Unfortunately for any and all NY estate planning clients with estates over these allotted amounts, a steep new (16%) Sixteen Percent New York State Estate Tax Rate will be replacing the gradual sliding scale that preceded it. Fortunately for New Yorkers these rates will only apply to fewer than (.1) One Tenth of (1%) One Percent of all estates nationally.
Once the New York Estate Tax was overhauled earlier this year only 8 States, Oregon, Nebraska, Iowa, Kentucky, Pennsylvania, Vermont, Maine, New Jersey plus the District of Columbia were left with worse State Estate Taxes. Of these States none is worse than New Jersey.
As both an experienced New York City and New Jersey Estate Planning Lawyer handling estates for families in New Jersey has always upset me. It was always very difficult for me to watch loved ones of a deceased person who failed to properly plan their estate, penalized with such exorbitant estate taxes at such a terrible time. No other State in the nation penalizes families more for failing to properly plan their affairs than New Jersey. Unlike any other State in the nation New Jersey imposes a hefty State estate tax on any estates with assets in excess of $675,000.00 and an additional inheritance tax on each beneficiary. Any estate planning lawyer in either New York City or New Jersey would tell you that that is crazy.
It is also unfair. Fortunately for my New Jersey Estate Planning clients this may be changing very soon. Currently the New Jersey Legislature has several bills in front of it proposing new law in an effort to completely repeal both the New Jersey Estate and Inheritance Taxes. While it is unclear whether the New Jersey Legislature will completely repeal their New Jersey Estate Taxes as proposed or implement a scheduled approach much like New York’s, this is a very necessary step in the right direction.
No matter what your State’s Estate Tax structure may be it is always necessary to begin planning your estate with an attorney drafted, supervised and witnessed will. If you or a loved one are thinking about planning your estate and would like to speak with a New York estate lawyer or NY wills lawyer, feel free to call The Law Offices of Jason W. Stern & Associates at (718) 261-2444 for a free consultation. Our Queens estate lawyers have nearly 45 years of combined NY estate law experience drafting and probating the wills for families like yours in the counties of Queens, New York, Kings, Bronx, Westchester, Rockland, Nassau, Orange, Dutchess as well as in the State of New Jersey.