How Much Passes Federal Estate Tax Free in New York?

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/


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w Much Passes Federal Estate Tax Free in New York? www davidovlaw com

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
http://www.davidovlaw.com/http://www.davidovlawgroup.com/http://www.davidovlawgroup.com/http://www.davidovlaw.com/

How Much Passes Federal Estate Tax Free in New York?

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