New York


New York Estate Planning Considerations


Common-Law State

New York is a Common Law State, which means the rules governing the ownership, division, and inheritance of income and property acquired by a husband or wife during their marriage hold that subject to various qualifications, each spouse owns and has complete control over their or her income and property.


Last Will and Testament


Will Creation

The minimum age of a person competent to make a will is 18. The number of witnesses necessary to execute a will is two.

Uniform Transfers to Minors Act (UTMA)

The original custodial gift may be a life insurance policy or annuity contract.

Custodial property may be invested in or used to pay premiums on (1) a policy on the minor’s life if the minor’s estate is the sole beneficiary, or (2) a policy on a third party in whom the child has an insurable interest if the minor or the custodian is the irrevocable beneficiary.

The custodial arrangement terminates when:

  • The minor child reaches age 21 for custodial transfers made by irrevocable lifetime gift, will, trust, or exercise of a power of appointment. This can be conveyed earlier at age 18 if noted in the trust terms.
  • The minor child reaches age 18 for other custodial transfers.
  • The minor child dies.

Dying without a Last Will, the {{ state_of_home }} laws of Intestacy

The estate goes to the surviving spouse, as follows:

  • If there are no surviving descendants, —100% of the estate
  • If there are surviving descendants—$50,000 plus 50% of the balance of the estate

If there is no surviving spouse, or if a portion of the estate does not go to the spouse:

  • 100% to descendants, by representation (see NY. Est. Powers and Trusts Law §1‐2.16)

If there is no surviving spouse or descendant:

  • 100% to surviving parent or parents equally

If there is no surviving spouse, descendant, or parent:

  • 100% to descendants of parents, by representation (see NY. Est. Powers and Trusts Law §1‐ 2.16)

If none of the above:

  • Intestacy laws outline further distribution steps to the level of grandparents, great‐grandparents, and their descendants. See NY. Est. Powers and Trusts Law §4‐1.1(a)(6), (7).
  • If no legally described recipient can be found, estate assets go to the state of New York.

Distributing Your Property With the Help of New York Trust Laws

New York trust laws allow you to provide loved ones with the right to your property through various types of trusts. Whether through an express, lifetime, or charitable trust, this type of estate planning assures you that certain people, organizations, or pets will be the beneficiaries of your property. Avoiding the often complicated New York probate process is also one of the main advantages of distributing your estate through a trust.

The following table outlines the specifics of New York’s trust laws.

  Code Sections

New York Code – Article 7: Trusts

New York Code – Article 8: Charitable Trust

  Trust Purpose

A trust may be created for any lawful purpose.

  Revocation of a Trust

The creator of a trust may revoke or amend the whole or a part of a valid trust with the written consent of all the persons beneficially interested in a trust of property.

  Lifetime Trusts

Under New York’s trust laws, a lifetime trust is created by a person who is still alive rather than upon a person’s death through a will. Any person 18 or older may dispose of property through a lifetime trust. Every estate held in property may be disposed of by a lifetime trust. A lifetime trust is irrevocable unless it expressly provides that it is revocable.

  Honorary Trusts for Pets

A trust for a domestic animal or pet’s care is valid under New York’s trust laws. This type of trust will terminate when no living animal is covered by the trust, or at the end of twenty-one years, whichever occurs earlier.

  Charitable Trusts

Charitable trusts are the disposition of property for religious, charitable, educational, or benevolent purposes. New York trust laws state that these trusts will not be invalid because they are designated as beneficiaries’ indefiniteness or uncertainty.

Digital Assets

Digital asset legislation, in many respects similar to the Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA), allows a fiduciary, which includes an executor or estate administrator, to access a decedent’s electronic mail, social networking, or microblogging accounts. The law also provides for the administration of digital assets and authorizes an online tool to direct the custodian concerning digital assets disclosure. 


Taxes


Inheritance Tax

New York does not impose an inheritance tax.

Credit Estate Tax

New York imposes an estate tax. Estate tax exclusions are as follows:

  2020, $5,850,000

  •  The increased exclusion amount is phased out for taxable estates between 100% and 105% of the exclusion amount and wholly eliminated for taxable estates exceeding 105% of the exclusion amount. Estates exceeding 105% of the basic exclusion amount are entirely subject to the New York graduated estate tax (not just the excess over the basic exclusion amount). Unlike the Federal portability provision, any unused exemption amount is not eligible for use by the surviving spouse.
  • Estate tax rates remain unchanged. The top tax rate remains 16%.
  • Before April 1, 2014, New York imposed an estate tax equal to the maximum credit permitted for paid state estate and inheritance taxes under the federal tax code in effect on July 1, 1998. The exemption amount was set at $1 million.

Generation-Skipping Transfer Tax (GST Tax)

The generation-skipping transfer tax was repealed in its entirety, effective April 1, 2014.

Before April 1, 2014, New York imposed a GST tax equal to the maximum credit permitted for paid GST tax under the federal code in effect on July 22, 1998.

Gift Tax

Lifetime taxable gifts made between April 1, 2014, and December 31, 2018, are added back to the decedent’s estate if made during the three years before death. Annual $15,000 (indexed) gift exclusion applies. This gift add-back does not apply to any individuals dying on or after January 1, 2019.

Before April 1, 2014, New York did not impose a gift tax.

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