Two estate taxes, different rules
The federal estate tax applies above an exemption amount that Congress has changed repeatedly and can change again. New York imposes its own estate tax with a lower threshold, and it has a sharp feature: an estate that exceeds the threshold by more than a small margin can lose the benefit of the exemption altogether. A spouse who dies first can often pass an unused federal exemption to the survivor, but New York does not allow the same carryover. Gifts made during life can matter too, under federal rules and, for gifts made shortly before death, under New York's. Because of these differences, a plan that looks efficient under federal rules may still leave a New York estate exposed.
Figures and records worth pulling
Approximate values of your home, investment accounts, retirement accounts, business interests, and life insurance help us estimate where your estate sits relative to the thresholds. Life insurance surprises many people, because a policy you own is usually counted in your taxable estate even though the payout goes straight to a beneficiary. Copies of any gift tax returns you have filed show how much of your exemption has been used. Records of what you paid for assets can matter for income tax later. If any assets sit outside New York or outside the United States, list them separately.
Choosing which taxes to plan around
We start by estimating whether estate tax is a realistic concern or whether income tax issues matter more for your family. Assets that pass at death often receive a new tax basis, which can make holding them preferable to giving them away during life, and the trade-off runs differently for each asset. Inherited retirement accounts usually carry income tax for the beneficiary, and the withdrawal rules affect how they should be left. We coordinate with your accountant on returns and valuations, and we are clear about what depends on future changes in the law. A plan driven by tax should still make sense for the family if the tax rules shift.
