Post on 03-Jun-2018
8/13/2019 How Much Passes Federal Estate Tax Free in New York?
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8/13/2019 How Much Passes Federal Estate Tax Free in New York?
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8/13/2019 How Much Passes Federal Estate Tax Free in New York?
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w Much Passes Federal Estate Tax Free in New York? www.davidovlaw.com
When you are looking at this figure you should understand the fact that transfers
of assets to your spouse do not count against your available exclusion. This is
because there is an unlimited marital deduction in place.
It should be noted that this deduction is only afforded to American citizens. If you
are an American citizen and you marry
someone from another country you have to
understand the fact that the marital deduction
will not apply.
The marital deduction is not available to
noncitizen spouses because the tax man wants
to get paid at some point in time. There is no
particular resistance to a marital deduction
because the surviving spouse is going to be
faced with estate tax exposure even if he or she
inherited resources tax-free.
If the unlimited marital deduction extended to
people who are citizens of other countries the
IRS may never get any money. Under these circumstances the surviving spouse
could simply take the tax-free inheritance back to his or her country of
citizenship. If this individual died in that country the tax laws of the United States
would not be applicable.
It should be noted that there is an effective estate planning strategy that can be
implemented if you are in fact married to someone who is not a citizen of the
United States. The creation of a qualified domestic trust can enable tax efficient
asset transfers to a noncitizen spouse.
No one wants to
pay the estate tax.
When given the
option, most people
would much rather
give their assets to
their loved ones
than to the
government.
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At the end of 2010 a tax relief act was passed that made the estate tax portable
between spouses. This allows you to use the exclusion that your deceased spouse
was entitled to utilize. As a result, if your spouse passed away this year and
neither of you had used any of your respective exclusions you would have a total
exclusion of $10.5 million available to you.
ADDITIONALGIFT TAXEXCLUSIONS
The $5.34 million per person unified exclusion is not the only exclusion that can
be utilized to give tax-free gifts. There is an annual gift tax exclusion that exists
apart from the unified lifetime exclusion. At the present time the amount of thisexclusion is $14,000 per person, per year.
You can give gifts valued at up to $14,000 to any number of individuals within a
calendar year without incurring any gift tax responsibility. If you wanted to give a
gift to someone that exceeded this amount within a calendar year you could do
that in a tax-free manner by utilizing some of your $5.34 million unified
exclusion.
Since this is a per person exclusion if you're married you and your spouse can
give as much as $28,000 annually to any number of gift recipients. Let's say that
you have a married daughter. You and your spouse as a couple could give
$28,000 to your daughter, and $28,000 to your son-in-law in a given year free of
taxation. Doing this over an extended period of time can be an effective tax
efficiency strategy.
Under the tax code you can also pay the school tuition of students free of the gift
tax. In addition, there is a medical exemption that allows you to pay medical bills
for others without incurring any transfer tax responsibility.
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GENERATION-SKIPPING TRANSFER TAX
The generation-skipping transfer tax is another tax on asset transfers that we
have on the federal level. This tax also has a $5.34 million exclusion and a 40
percent top rate. It is applicable to transfers of assets to people within your family
who are more than one generation younger than you. It can also be applied to
asset transfers to people who aren't family members who are at least 37.5 years
younger than you.
CONCLUSION
You can transfer as much as $5.34 million to others free of federal transfer taxes.
Anything above this is subject to a 40 percent tax.
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Estate tax efficiency strategies can be implemented to reduce or even eliminate
your estate tax exposure. High net worth individuals absolutely must take steps
to preserve their wealth given the high rate of these transfer taxes. This can be
accomplished with the assistance of a licensed estate planning lawyer.
REFERENCES
Internal Revenue Servicehttp://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Estate-and-Gift-Taxes
Forbeshttp://www.forbes.com/sites/deborahljacobs/2013/01/02/after-the-fiscal-cliff-deal-estate-and-gift-tax-explained/
http://www.davidovlaw.com/http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Estate-and-Gift-Taxeshttp://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Estate-and-Gift-Taxeshttp://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Estate-and-Gift-Taxeshttp://www.forbes.com/sites/deborahljacobs/2013/01/02/after-the-fiscal-cliff-deal-estate-and-gift-tax-explained/http://www.forbes.com/sites/deborahljacobs/2013/01/02/after-the-fiscal-cliff-deal-estate-and-gift-tax-explained/http://www.forbes.com/sites/deborahljacobs/2013/01/02/after-the-fiscal-cliff-deal-estate-and-gift-tax-explained/http://www.forbes.com/sites/deborahljacobs/2013/01/02/after-the-fiscal-cliff-deal-estate-and-gift-tax-explained/http://www.forbes.com/sites/deborahljacobs/2013/01/02/after-the-fiscal-cliff-deal-estate-and-gift-tax-explained/http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Estate-and-Gift-Taxeshttp://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Estate-and-Gift-Taxeshttp://www.davidovlaw.com/8/13/2019 How Much Passes Federal Estate Tax Free in New York?
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About the Authors
Ilana Davidov and Michael Davidov
Ilana Davidov, Esq. and Michael Davidov, Esq., CFP, are
partners in the law firm of Davidov Law Group, P.C. Their areas
of expertise include estate planning, elder law, Medicaid
planning, tax law, trust and estate administration, as well as
estate litigation. Together they have represented hundreds of
families, creating their estate plans and helping them navigate
long-term care and tax issues.
Ilana Davidov has been practicing law for over a decade. Her
varied professional career includes a position as a former Court Attorney for the New York State
Supreme Court, Appellate Division. She has served as counsel to a Long Island firm where she practiced
in the areas of estate planning and real estate. Over the years, Mrs. Davidovs experience has included
serving as legal counsel to a title agency, several real estate developers, and representing over 25
lending institutions. Today, clients turn to Mrs. Davidov to help preserve their legacies and plan for the
future.
Michael Davidov works as an advocate for seniors and their families, executors, trustees, and
beneficiaries. He practices before the Surrogate Court, Supreme Court and before Administrative
agencies in matters relating to guardianship proceedings, will contests, fiduciary misconduct actions,
accounting proceedings, kinship trials, proving the rights of non-marital children, Medicaid fair hearings
and Veterans benefits eligibility. Mr. Davidov is an accredited attorney with the Veterans
Administration since 2008, and is also a Fellow of the American Academy of Estate Planning Attorneys.
Adding further to his list of accomplishments, Mr. Davidov holds a designation as a Certified Financial
Planning Professional. He was selected as a Super Lawyer to the 2013 New York Metro Rising Stars
List, has been designated as a King of Queens.
Both Ilana and Michael Davidov are regular lecturers at public and private workshops, as well as
contribute articles and interviews on topics relating to estate planning and elder. They are members of
the American Academy of Estate Planning Attorneys, and the New York State and Queens County Bar
Associations. They are both fluent in Hebrew and Russian.
Davidov Law Group
www.davidovlawgroup.com80-02 Kew Gardens Road, Suite 605
Kew Gardens, NY 11415
Phone: 718-793-7000
Fax: 718-793-7222
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