New York Estate Tax Law

New York Estate Tax Law

New York Estate Tax Law

New York Estate Tax Law

In New York State, the law is quite technical. All lifeinsurance proceeds payable to a surviving spouse, which mustbe included in the gross estate under the federal estate taxlaw, are includable in the New York State tax provisions tothe extent that the proceeds exceed $100,000. Against this, however, credits or deductions are allowed for (a) the total of all of the personal exemptions and (b) the marital deduction.New York does not allow an exemption with respect to insurance included in the marital deduction. However, where lifeinsurance naming a surviving spouse as beneficiary brings thetotal property left to the spouse above the 50% marital deduc tion, the overage will not be deducted from the $100,000exemption.

Learn More About Life Estate Planning

In New York State, where life insurance proceeds are receivable by beneficiaries other than the surviving spouse, under policies includable in the gross estate under federalestate tax law, there is an exemption of $100,000 less: (a) thetotal of personal exemptions; (b) the insurance exemptionallowed with respect to proceeds receivable by the survivingspouse, and (c) $20,000 or the marital deduction, whicheveris less.

These provisions reemphasize the importance of divestingthe insured of the incidents of ownership. As against this,however, the insured must weigh the problems of control.

State inheritance, transfer, and estate taxes change morerapidly than federal taxes. You should consult your attorney

at regular intervals to be sure that your Will and your estateplans are up-to-date "taxwise," both for the state of yourresidence and for the Internal Revenue Service. If you contemplate a change of residence for tax purposes, you should familiarize yourself through yourattorneywho may find itnecessary to consult an attorney in the state to which youcontemplate movingwith all of the requirements of bothstates, so you can take maximum advantage of allowabledeductions.

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