The bulk of the assets that a decedent leaves to his or her loved ones are usually made up of retirement accounts (e.g., IRA, 401(k)), life insurance policies, annuities, employee benefit plans or stock options.
Estates & Trusts Blog
On April 12, 2019, Governor Cuomo signed into law the New York Fiscal Year 2020 Budget, which included an amendment retroactively extending the three-year “clawback” provisions of Section 954(a)(3) of the New York Tax Law to certain taxable gifts made by New York residents within three (3) years of death up through the new expiration date of January 1, 2026 (the “three-year clawback”).
If you made gifts in 2018 in excess of the gift tax annual exclusion amount - $15,000 per donee in 2018, or $30,000 if a husband and wife elect to split gifts - you must file a gift tax return and apply your lifetime gift tax exemption to report these gifts.
If you made a gift to a Trust that has the potential to distribute property to a grandchild, it is important to file a gift tax return to have a clear record of the Generation-Skipping Transfer (GST) tax exemption allocated to the Trust.
There is no time like the present for individuals to review, revise and/or implement their estate planning strategy. Even if you believe that your estate planning documents are completed and you have a sound estate planning strategy in place, it is prudent for you to thoroughly review your documents to be certain that the plan you think is currently in place is the plan that will actually take effect upon your incapacity or death.
As we all know, the 2017 Tax Cuts and Jobs Act (TCJA) granted a doubled estate and gift tax exemption to the rich by essentially increasing the unified credit basic exclusion amount for gift and estate taxes by nearly $6 million, from $5.49 million per individual (in 2017) to $11.4 million per individual (in 2019), with the increase set to sunset in 2026.
Since the federal estate tax exemption has risen to $11.18 million per individual under the 2017 Tax Act (with this amount doubling for married couples), many individuals believe that they require only very simplistic estate planning, or that they do not require any estate planning at all.
By now, everyone has heard of the Tax Cuts and Jobs Act and how it increased the federal gift and estate tax exemption to approximately $11.2 million per person in 2018, with the exemption amount being doubled to approximately $22.4 million for married couples. Further, thanks to portability, the estate of a surviving spouse can use the unused portion of the deceased spouse’s exemption amount.
For many children who graduate from high school, the next step in their journey to adulthood is college. For many children, this is the first time they will be living away from home and/or making significant life decisions on their own, without their parents’ assistance or supervision. This can be a difficult transition for a child, but even more so for a parent who, for the last 17 years, has been making all of his/her child’s major decisions.
When it comes to your estate plan, it is important to periodically review your beneficiary designation forms in order to ensure that they are correct. This is a vital part of the planning process for all individuals, and it is often overlooked, many times causing the person that an individual wanted to receive certain assets to receive nothing.
Getting divorced is a complicated and drawn-out process, where emotions run high and the last thing on an individual’s mind is updating his/her estate planning documents. While that is indeed the case for many individuals going through a divorce, once a divorce is finalized, it is imperative that individuals review their estate planning documents and amend or update them so that they will reflect the individual’s new planning goals. This review does not stop at a Will or Trust; rather, it will be necessary for individuals to review all of their financial accounts - their bank account inf