Q: Has New York State enacted new estate and gift tax laws to follow the American Taxpayer Relief Act of 2012, signed into law on January 2, 2013?
A: No. The State of New York has its own estate, gift and GST system. While based in large part on federal tax laws, New York’s exemptions and rates are significantly different from the federal law, which include the following important differences:
• Federal law provides a $5,000,000 lifetime exemption from estate, gift and generation-skipping tax, indexed for inflation (the inflation adjusted exemption in 2013 is expected to be $5,250,000).
• While New York repealed its gift tax effective January 1, 2000, New York’s estate tax exemption is only $1,000,000 and the law does not include an inflation adjustment provision.
• Under federal law, the “portability” provisions enacted into law in 2010 now permit a surviving spouse dying to use his or her deceased spouse’s unused gift and estate tax exemption.
• New York has not adopted any spousal “portability” provisions.
While New York’s top estate tax rate is lower than the top rate imposed on federally taxable estates, the substantially lower exemption of $1,000,000 and absence of spousal portability necessitates additional and separate estate planning for many New York State taxpayers, regardless of whether they anticipate having to pay federal estate taxes.
In 2004, Nathaniel L. Corwin was named a Member of Meyer, Suozzi, English & Klein, P.C. located in Garden City, Long Island, N.Y. Previously, he held the position Of Counsel from 1999 in the firm’s Trusts and Estates department. From 1989 to 1991, he was an associate in the firm’s Corporate and Securities Law practice. While Mr. Corwin’s practice now centers on the area of trusts and estates, he also performs legal work in the areas of corporate law, real estate, municipal law and contractual matters. His work includes the drafting of sophisticated wills and trusts, formation and organization of limited liability companies and limited partnerships for a broad spectrum of business ventures, the administration of estates, and handling of residential and commercial real estate and leasing transactions for the firm's trusts and estates clients.