Tax

Why We Need Estate Tax Attorneys

The laws and regulations relating to estate and gift taxes can be very complicated. We strongly recommended that individuals consult a qualified New York estate tax attorney, especially if an estate is large.

An estate tax attorney well-versed in estate tax law can answer questions such as: what is the federal estate tax's relationship to the federal gift tax? Have any estate and gift tax changes been made recently and what were those changes? What assets are counted to determine if my estate is taxable? How is the property in my estate valued for federal estate taxes? What is considered the "right" value in appraising property for federal estate taxes? When does the estate tax kick in? What is the unified tax credit all about? And can I avoid the federal estate tax by leaving everything to my spouse?

Estate Tax Laws

The applicability of the estate tax laws differ among the various states and also between the states and the Federal system. For example, under the concept of portability, which applies to the federal estate tax, a surviving spouse can obtain the use of the tax exclusion in the amount that was not used by a pre-deceased spouse. Assume that each spouse had a Federal estate tax exclusion amount of $5,000,000. If the first spouse to die did not use any of this exclusion to reduce estate taxes, then the full amount could be transferred to the surviving spouse. This would give the surviving spouse a $10 million exclusion. Unfortunately, at present, New York State does not allow any portability regarding the New York State estate tax.

Due to the various intricacies of the tax laws, it is a good idea to consult with someone who is experienced in this field. Also, once a person dies and an executor or fiduciary is appointed to handle estate affairs, such a fiduciary can become personally responsible if the estate tax issues are not professionally dealt with.

Since a payment on account of estate taxes is due within 9 months of a decedent's death, it is important to have a fiduciary appointed for an estate so that asset value estimates can be made. Even if the probate or administration process is delayed due to estate litigation, a preliminary executor or temporary administrator can be appointed to protect the estate and file the needed taxes.

Regardless of the size of an estate, most adults — young and old — and their families benefit greatly from having a well-prepared estate plan consisting of documents including a Last Will, Health Care Proxy, Power of Attorney, and Living Will. We work with and advise clients in the creation and implementation of plans that effectively express the clients’ personal desires regarding the disposition and protection of assets while providing potential tax advantages and security for family and beneficiaries.