Understanding New York State Gift Tax: Insights from Attorney Seth Schlessel
Estate planning is an essential aspect of financial security for individuals and families. In the complexities of New York State’s estate planning laws, Seth Schlessel, a dedicated Long Island estate planning attorney at Schlessel Law PLLC, provides invaluable insights into the nuances of gift and estate taxes. With his expertise, he helps residents navigate the legal and financial implications of transferring wealth to their loved ones. This article delves into the essential points related to New York’s gift tax, informed by Schlessel’s expertise.
Clarifying Gift Tax Vs. Estate Tax
One of the pivotal points that Seth Schlessel emphasizes is the distinction between New York’s estate tax and the federal gift tax. While New York does not levy a state gift tax, it is crucial to understand that gifts made within three years of the donor’s passing can still be included in the total estate value, leading to potential tax liabilities. This provision serves to ensure that individuals cannot circumvent estate taxes by transferring substantial assets shortly before death.
The Annual Gift Exemption
Under federal law, individuals can gift up to $17,000 per recipient annually without incurring any gift tax liabilities, a strategic advantage that can be instrumental in estate planning. Schlessel notes, "This exemption offers a pathway for individuals to transfer wealth to family members and other beneficiaries while sidestepping immediate tax consequences." This capacity for annual gifting presents an opportunity to diminish the taxable estate over time, making it an essential tool for Long Island residents looking to manage their estate taxes effectively.
Impact of Larger Gifts
For those considering larger gifts exceeding the annual federal exemption, it is crucial to recognize the potential consequences. Such gifts can trigger federal gift tax obligations and reduce the individual’s lifetime estate tax exclusion, currently set at $12.92 million. However, projections indicate a reduction to $5 million (adjusted for inflation) in 2026. This impending change necessitates timely and strategic planning for anyone contemplating substantial gifts as part of their estate strategy.
The Three-Year Clawback Rule
Seth Schlessel highlights the "three-year clawback rule," which can have significant implications for estate planning. Gifts made within three years before death may be added back into the estate’s value for tax calculations. This rule was introduced to prevent estate tax avoidance through significant last-minute gifting. "It’s a pivotal aspect of New York’s estate tax regulations that many are unaware of," Schlessel stresses, underscoring the importance of understanding these legal frameworks when making gifts.
Capital Gains Tax Liability
In addition to gift and estate taxes, Seth Schlessel cautions that potential capital gains taxes can arise from gifting appreciated assets such as real estate or stocks. When these assets are sold by the recipient, they could incur significant capital gains taxes based on the appreciation of the asset since its acquisition by the donor. To mitigate these effects, Schlessel suggests considering the gifting of cash or assets with minimal appreciation to reduce future tax burdens.
The Importance of Comprehensive Estate Planning
With the intricate landscape of New York’s estate and gift taxes, cohesive planning is vital. Schlessel works diligently with individuals and families to design thorough estate plans aimed at preserving wealth for future generations. He advises clients to regularly review their estate plans in light of evolving tax laws and personal circumstances to ensure that their intentions are accurately reflected and executed.
Personalized Estate Planning Services
At Schlessel Law PLLC, clients receive tailored estate planning services, adeptly addressing the individual needs and concerns of each client. Whether it’s through effective gifting strategies, trust establishment, or will preparation, Seth Schlessel’s client-first approach aims to provide peace of mind and security concerning their wealth and family legacy.
Conclusion
Navigating the complexities of gift and estate taxes in New York is crucial for effective and meaningful estate planning. With ever-changing tax laws and financial implications, partnering with an experienced estate planning attorney can make all the difference. Seth Schlessel and the team at Schlessel Law PLLC are dedicated to offering the guidance and expertise necessary to secure a financial legacy that withstands the tests of time.
For more information or to schedule a consultation, visit Schlessel Law PLLC or reach out via email at [email protected].
About Schlessel Law PLLC
Schlessel Law PLLC, located in Long Island, New York, specializes in estate planning, elder law, and real estate law. Led by Seth Schlessel, the firm is committed to delivering tailored legal services that empower clients to protect their assets, plan for the future, and ensure a smooth transition of wealth. The firm prides itself on a client-centered approach, fostering personalized solutions that align with the unique circumstances of each individual and family.
For media inquiries, please contact:
- Company Name: Schlessel Law PLLC
- Contact Person: Seth Schlessel
- Email: Send Email
- Phone: (516) 574-9630
- Address: 34 Willis Ave Suite 300, Mineola, New York, 11501
- Website: Schlessel Law PLLC
